Correlation Between Alphatec Holdings and LivaNova PLC

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

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

Diversification Opportunities for Alphatec Holdings and LivaNova PLC

0.3

Correlation Coefficient

Alphatec Holdings  LivaNova PLC

Weak diversification

The 3 months correlation between Alphatec and LivaNova is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and LivaNova PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivaNova PLC 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 LivaNova PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivaNova PLC has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and LivaNova PLC go up and down completely randomly.

Pair Corralation between Alphatec Holdings and LivaNova PLC

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 1.27 times more return on investment than LivaNova PLC. However, Alphatec Holdings is 1.27 times more volatile than LivaNova PLC. It trades about 0.07 of its potential returns per unit of risk. LivaNova PLC is currently generating about -0.08 per unit of risk. If you would invest  908.00  in Alphatec Holdings on December 30, 2024 and sell it today you would earn a total of  111.00  from holding Alphatec Holdings or generate 12.22% return on investment over 90 days.

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

Alphatec Holdings  vs.  LivaNova PLC

Alphatec Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 5 (%) 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.

LivaNova PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LivaNova PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alphatec Holdings and LivaNova PLC

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

The idea behind Alphatec Holdings and LivaNova PLC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.