Correlation Between Parkson Retail and Align Technology

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

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

Diversification Opportunities for Parkson Retail and Align Technology

0.17

Correlation Coefficient

Parkson Retail  Align Technology

Average diversification

The 3 months correlation between Parkson and Align is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Parkson Retail Group and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Parkson Retail 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 Parkson Retail Group 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 Parkson Retail i.e., Parkson Retail and Align Technology go up and down completely randomly.

Pair Corralation between Parkson Retail and Align Technology

Assuming the 90 days trading horizon Parkson Retail is expected to generate 1.07 times less return on investment than Align Technology. In addition to that, Parkson Retail is 1.99 times more volatile than Align Technology. It trades about 0.02 of its total potential returns per unit of risk. Align Technology is currently generating about 0.05 per unit of volatility. If you would invest  15,585  in Align Technology on April 23, 2025 and sell it today you would earn a total of  835.00  from holding Align Technology or generate 5.36% return on investment over 90 days.

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

Parkson Retail Group  vs.  Align Technology

Parkson Retail Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Parkson Retail Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Parkson Retail may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Align Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Align Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Parkson Retail and Align Technology

The main advantage of trading using opposite Parkson Retail and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkson Retail 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 Parkson Retail Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.