Correlation Between Allegro Microsystems and Alignment Healthcare

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

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

Diversification Opportunities for Allegro Microsystems and Alignment Healthcare

-0.74

Correlation Coefficient

Allegro Microsystems  Alignment Healthcare

Pay attention - limited upside

The 3 months correlation between Allegro and Alignment is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Allegro Microsystems and Alignment Healthcare LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alignment Healthcare LLC and Allegro Microsystems 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 Allegro Microsystems are associated (or correlated) with Alignment Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alignment Healthcare LLC has no effect on the direction of Allegro Microsystems i.e., Allegro Microsystems and Alignment Healthcare go up and down completely randomly.

Pair Corralation between Allegro Microsystems and Alignment Healthcare

Given the investment horizon of 90 days Allegro Microsystems is expected to generate 0.91 times more return on investment than Alignment Healthcare. However, Allegro Microsystems is 1.1 times less risky than Alignment Healthcare. It trades about 0.09 of its potential returns per unit of risk. Alignment Healthcare LLC is currently generating about -0.03 per unit of risk. If you would invest  2,712  in Allegro Microsystems on May 18, 2025 and sell it today you would earn a total of  358.00  from holding Allegro Microsystems or generate 13.2% return on investment over 90 days.

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

Allegro Microsystems  vs.  Alignment Healthcare LLC

Allegro Microsystems

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Allegro Microsystems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Allegro Microsystems displayed solid returns over the last few months and may actually be approaching a breakup point.

Alignment Healthcare LLC

Risk-Adjusted Performance

Weakest

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

Pair Trading with Allegro Microsystems and Alignment Healthcare

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

The idea behind Allegro Microsystems and Alignment Healthcare LLC 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.