Correlation Between Tivic Health and Alphatec Holdings

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

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

Diversification Opportunities for Tivic Health and Alphatec Holdings

0.21

Correlation Coefficient

Tivic Health  Alphatec Holdings

Modest diversification

The 3 months correlation between Tivic and Alphatec is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tivic Health Systems and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings and Tivic Health 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 Tivic Health Systems are associated (or correlated) with Alphatec Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphatec Holdings has no effect on the direction of Tivic Health i.e., Tivic Health and Alphatec Holdings go up and down completely randomly.

Pair Corralation between Tivic Health and Alphatec Holdings

Given the investment horizon of 90 days Tivic Health Systems is expected to under-perform the Alphatec Holdings. In addition to that, Tivic Health is 1.47 times more volatile than Alphatec Holdings. It trades about -0.01 of its total potential returns per unit of risk. Alphatec Holdings is currently generating about 0.13 per unit of volatility. If you would invest  690.00  in Alphatec Holdings on August 30, 2024 and sell it today you would earn a total of  347.00  from holding Alphatec Holdings or generate 50.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Tivic Health Systems  vs.  Alphatec Holdings

Tivic Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tivic Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Tivic Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain technical and fundamental indicators, Alphatec Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tivic Health and Alphatec Holdings

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

The idea behind Tivic Health Systems and Alphatec Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.