Correlation Between Alphatec Holdings and Artivion

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

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

Diversification Opportunities for Alphatec Holdings and Artivion

0.86

Correlation Coefficient

Alphatec Holdings  Artivion

Very poor diversification

The 3 months correlation between Alphatec and Artivion is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Artivion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artivion and Alphatec Holdings 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 Alphatec Holdings are associated (or correlated) with Artivion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artivion has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Artivion go up and down completely randomly.

Pair Corralation between Alphatec Holdings and Artivion

Given the investment horizon of 90 days Alphatec Holdings is expected to under-perform the Artivion. In addition to that, Alphatec Holdings is 1.54 times more volatile than Artivion. It trades about -0.24 of its total potential returns per unit of risk. Artivion is currently generating about -0.01 per unit of volatility. If you would invest  2,905  in Artivion on September 28, 2024 and sell it today you would lose (22.00) from holding Artivion or give up 0.76% of portfolio value over 90 days.

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

Alphatec Holdings  vs.  Artivion

Alphatec Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Alphatec Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Artivion

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artivion are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Artivion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alphatec Holdings and Artivion

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

The idea behind Alphatec Holdings and Artivion 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.

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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.