Correlation Between Alignment Healthcare and Purecycle Technologies

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

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

Diversification Opportunities for Alignment Healthcare and Purecycle Technologies

-0.82

Correlation Coefficient

Alignment Healthcare  Purecycle Technologies

Pay attention - limited upside

The 3 months correlation between Alignment and Purecycle is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and Purecycle Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purecycle Technologies and Alignment 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 Alignment Healthcare LLC are associated (or correlated) with Purecycle Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purecycle Technologies has no effect on the direction of Alignment Healthcare i.e., Alignment Healthcare and Purecycle Technologies go up and down completely randomly.

Pair Corralation between Alignment Healthcare and Purecycle Technologies

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to generate 0.53 times more return on investment than Purecycle Technologies. However, Alignment Healthcare LLC is 1.89 times less risky than Purecycle Technologies. It trades about 0.44 of its potential returns per unit of risk. Purecycle Technologies Holdings is currently generating about -0.23 per unit of risk. If you would invest  1,550  in Alignment Healthcare LLC on January 12, 2025 and sell it today you would earn a total of  424.00  from holding Alignment Healthcare LLC or generate 27.35% return on investment over 90 days.

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

Alignment Healthcare LLC  vs.  Purecycle Technologies Holding

Alignment Healthcare LLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alignment Healthcare LLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, Alignment Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Purecycle Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Purecycle Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Alignment Healthcare and Purecycle Technologies

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

The idea behind Alignment Healthcare LLC and Purecycle Technologies 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 Stocks Directory module to find actively traded stocks across global markets.