Correlation Between Alphatec Holdings and Bruker

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

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

Diversification Opportunities for Alphatec Holdings and Bruker

-0.46

Correlation Coefficient

Alphatec Holdings  Bruker

Very good diversification

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

Pair Corralation between Alphatec Holdings and Bruker

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 1.3 times more return on investment than Bruker. However, Alphatec Holdings is 1.3 times more volatile than Bruker. It trades about 0.06 of its potential returns per unit of risk. Bruker is currently generating about -0.13 per unit of risk. If you would invest  965.00  in Alphatec Holdings on December 10, 2024 and sell it today you would earn a total of  81.00  from holding Alphatec Holdings or generate 8.39% return on investment over 90 days.

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

Alphatec Holdings  vs.  Bruker

Alphatec Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Alphatec Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bruker

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Alphatec Holdings and Bruker

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

The idea behind Alphatec Holdings and Bruker 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.