Correlation Between Acadia Healthcare and Alphatec Holdings

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

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

Diversification Opportunities for Acadia Healthcare and Alphatec Holdings

-0.27

Correlation Coefficient

Acadia Healthcare  Alphatec Holdings

Very good diversification

The 3 months correlation between Acadia and Alphatec is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings and Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare i.e., Acadia Healthcare and Alphatec Holdings go up and down completely randomly.

Pair Corralation between Acadia Healthcare and Alphatec Holdings

Given the investment horizon of 90 days Acadia Healthcare is expected to generate 2.78 times less return on investment than Alphatec Holdings. But when comparing it to its historical volatility, Acadia Healthcare is 1.11 times less risky than Alphatec Holdings. It trades about 0.05 of its potential returns per unit of risk. Alphatec Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,110  in Alphatec Holdings on June 29, 2025 and sell it today you would earn a total of  392.00  from holding Alphatec Holdings or generate 35.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Acadia Healthcare  vs.  Alphatec Holdings

Acadia Healthcare

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Acadia Healthcare are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Acadia Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alphatec Holdings

Risk-Adjusted Performance

Fair

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 weak 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 Acadia Healthcare and Alphatec Holdings

The main advantage of trading using opposite Acadia Healthcare and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare 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 Acadia Healthcare 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.