Correlation Between Aethlon Medical and Align Technology

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aethlon Medical and Align Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aethlon Medical and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aethlon Medical and Align Technology, you can compare the effects of market volatilities on Aethlon Medical and Align Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aethlon Medical with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aethlon Medical and Align Technology.

Diversification Opportunities for Aethlon Medical and Align Technology

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Aethlon and Align is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon Medical and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Aethlon Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aethlon Medical are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Aethlon Medical i.e., Aethlon Medical and Align Technology go up and down completely randomly.

Pair Corralation between Aethlon Medical and Align Technology

Given the investment horizon of 90 days Aethlon Medical is expected to under-perform the Align Technology. In addition to that, Aethlon Medical is 1.69 times more volatile than Align Technology. It trades about -0.04 of its total potential returns per unit of risk. Align Technology is currently generating about 0.04 per unit of volatility. If you would invest  21,964  in Align Technology on January 19, 2024 and sell it today you would earn a total of  8,170  from holding Align Technology or generate 37.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aethlon Medical  vs.  Align Technology

 Performance 
       Timeline  
Aethlon Medical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aethlon Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Align Technology 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Align Technology displayed solid returns over the last few months and may actually be approaching a breakup point.

Aethlon Medical and Align Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aethlon Medical and Align Technology

The main advantage of trading using opposite Aethlon Medical and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aethlon Medical position performs unexpectedly, Align Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Align Technology will offset losses from the drop in Align Technology's long position.
The idea behind Aethlon Medical and Align Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm