Correlation Between Alphatec Holdings and Globus Medical
Can any of the company-specific risk be diversified away by investing in both Alphatec Holdings and Globus Medical 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 Globus Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphatec Holdings and Globus Medical, you can compare the effects of market volatilities on Alphatec Holdings and Globus Medical 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 Globus Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphatec Holdings and Globus Medical.
Diversification Opportunities for Alphatec Holdings and Globus Medical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alphatec and Globus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Globus Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Medical 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 Globus Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Medical has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Globus Medical go up and down completely randomly.
Pair Corralation between Alphatec Holdings and Globus Medical
Given the investment horizon of 90 days Alphatec Holdings is expected to generate 4.61 times less return on investment than Globus Medical. In addition to that, Alphatec Holdings is 2.28 times more volatile than Globus Medical. It trades about 0.01 of its total potential returns per unit of risk. Globus Medical is currently generating about 0.13 per unit of volatility. If you would invest 4,489 in Globus Medical on August 24, 2024 and sell it today you would earn a total of 4,002 from holding Globus Medical or generate 89.15% 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. Globus Medical
Performance |
| Timeline |
| Alphatec Holdings |
| Globus Medical |
Alphatec Holdings and Globus Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphatec Holdings and Globus Medical
The main advantage of trading using opposite Alphatec Holdings and Globus Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphatec Holdings position performs unexpectedly, Globus Medical 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 Globus Medical will offset losses from the drop in Globus Medical's long position.| Alphatec Holdings vs. Globus Medical | Alphatec Holdings vs. Orthofix Medical | Alphatec Holdings vs. CONMED | Alphatec Holdings vs. LivaNova PLC |
| Globus Medical vs. Orthofix Medical | Globus Medical vs. CONMED | Globus Medical vs. Alphatec Holdings | Globus Medical vs. LivaNova PLC |
Check out your portfolio center.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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