Correlation Between Align Technology and G2D Investments

Can any of the company-specific risk be diversified away by investing in both Align Technology and G2D Investments 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 Align Technology and G2D Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Align Technology and G2D Investments, you can compare the effects of market volatilities on Align Technology and G2D Investments 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 Align Technology with a short position of G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and G2D Investments.

Diversification Opportunities for Align Technology and G2D Investments

0.46

Correlation Coefficient

Align Technology  G2D Investments

Very weak diversification

The 3 months correlation between Align and G2D is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments and Align Technology 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 Align Technology are associated (or correlated) with G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of Align Technology i.e., Align Technology and G2D Investments go up and down completely randomly.

Pair Corralation between Align Technology and G2D Investments

Assuming the 90 days trading horizon Align Technology is expected to generate 2.13 times less return on investment than G2D Investments. But when comparing it to its historical volatility, Align Technology is 1.45 times less risky than G2D Investments. It trades about 0.06 of its potential returns per unit of risk. G2D Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  154.00  in G2D Investments on April 24, 2025 and sell it today you would earn a total of  20.00  from holding G2D Investments or generate 12.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Align Technology  vs.  G2D Investments

Align Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Align Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

G2D Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G2D Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, G2D Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Align Technology and G2D Investments

The main advantage of trading using opposite Align Technology and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.

The idea behind Align Technology and G2D Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.