Correlation Between Alphatec Holdings and Zhongchao
Can any of the company-specific risk be diversified away by investing in both Alphatec Holdings and Zhongchao 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 Zhongchao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphatec Holdings and Zhongchao, you can compare the effects of market volatilities on Alphatec Holdings and Zhongchao 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 Zhongchao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphatec Holdings and Zhongchao.
Diversification Opportunities for Alphatec Holdings and Zhongchao
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alphatec and Zhongchao is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Zhongchao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongchao 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 Zhongchao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongchao has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Zhongchao go up and down completely randomly.
Pair Corralation between Alphatec Holdings and Zhongchao
Given the investment horizon of 90 days Alphatec Holdings is expected to under-perform the Zhongchao. But the stock apears to be less risky and, when comparing its historical volatility, Alphatec Holdings is 1.12 times less risky than Zhongchao. The stock trades about -0.05 of its potential returns per unit of risk. The Zhongchao is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Zhongchao on November 27, 2024 and sell it today you would lose (3.00) from holding Zhongchao or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphatec Holdings vs. Zhongchao
Performance |
| Timeline |
| Alphatec Holdings |
| Zhongchao |
Alphatec Holdings and Zhongchao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphatec Holdings and Zhongchao
The main advantage of trading using opposite Alphatec Holdings and Zhongchao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphatec Holdings position performs unexpectedly, Zhongchao 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 Zhongchao will offset losses from the drop in Zhongchao's long position.| Alphatec Holdings vs. Globus Medical | Alphatec Holdings vs. Orthofix Medical | Alphatec Holdings vs. CONMED | Alphatec Holdings vs. LivaNova PLC |
| Zhongchao vs. Nano Mobile Healthcare | Zhongchao vs. Healthcare Triangle | Zhongchao vs. Cannabis Sativa | Zhongchao vs. FOXO Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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