Correlation Between Paragon 28 and Alphatec Holdings
Can any of the company-specific risk be diversified away by investing in both Paragon 28 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 Paragon 28 and Alphatec Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and Alphatec Holdings, you can compare the effects of market volatilities on Paragon 28 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 Paragon 28 with a short position of Alphatec Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Alphatec Holdings.
Diversification Opportunities for Paragon 28 and Alphatec Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Paragon and Alphatec is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings and Paragon 28 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 Paragon 28 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 Paragon 28 i.e., Paragon 28 and Alphatec Holdings go up and down completely randomly.
Pair Corralation between Paragon 28 and Alphatec Holdings
Considering the 90-day investment horizon Paragon 28 is expected to generate 0.97 times more return on investment than Alphatec Holdings. However, Paragon 28 is 1.03 times less risky than Alphatec Holdings. It trades about 0.41 of its potential returns per unit of risk. Alphatec Holdings is currently generating about 0.34 per unit of risk. If you would invest 484.00 in Paragon 28 on August 28, 2024 and sell it today you would earn a total of 502.00 from holding Paragon 28 or generate 103.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paragon 28 vs. Alphatec Holdings
Performance |
| Timeline |
| Paragon 28 |
| Alphatec Holdings |
Paragon 28 and Alphatec Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon 28 and Alphatec Holdings
The main advantage of trading using opposite Paragon 28 and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 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.| Paragon 28 vs. Pulmonx Corp | Paragon 28 vs. Iradimed Co | Paragon 28 vs. Orthofix Medical | Paragon 28 vs. Neuropace |
| Alphatec Holdings vs. EUDA Health Holdings | Alphatec Holdings vs. Nutex Health | Alphatec Holdings vs. Healthcare Triangle | Alphatec Holdings vs. Mangoceuticals, Common Stock |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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