Correlation Between Alphatec Holdings and Integer Holdings

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

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

Diversification Opportunities for Alphatec Holdings and Integer Holdings

0.8

Correlation Coefficient

Alphatec Holdings  Integer Holdings

Very poor diversification

The 3 months correlation between Alphatec and Integer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Integer Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integer Holdings Corp 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 Integer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integer Holdings Corp has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Integer Holdings go up and down completely randomly.

Pair Corralation between Alphatec Holdings and Integer Holdings

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 3.91 times more return on investment than Integer Holdings. However, Alphatec Holdings is 3.91 times more volatile than Integer Holdings Corp. It trades about 0.14 of its potential returns per unit of risk. Integer Holdings Corp is currently generating about 0.11 per unit of risk. If you would invest  680.00  in Alphatec Holdings on September 1, 2024 and sell it today you would earn a total of  368.00  from holding Alphatec Holdings or generate 54.12% return on investment over 90 days.

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

Alphatec Holdings  vs.  Integer Holdings Corp

Alphatec Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 10 (%) 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.

Integer Holdings Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Alphatec Holdings and Integer Holdings

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

The idea behind Alphatec Holdings and Integer Holdings Corp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.