Correlation Between Alphatec Holdings and Align Technology

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

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

Diversification Opportunities for Alphatec Holdings and Align Technology

-0.47

Correlation Coefficient

Alphatec Holdings  Align Technology

Very good diversification

The 3 months correlation between Alphatec and Align is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Align Technology go up and down completely randomly.

Pair Corralation between Alphatec Holdings and Align Technology

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 0.45 times more return on investment than Align Technology. However, Alphatec Holdings is 2.22 times less risky than Align Technology. It trades about -0.08 of its potential returns per unit of risk. Align Technology is currently generating about -0.07 per unit of risk. If you would invest  1,198  in Alphatec Holdings on May 3, 2025 and sell it today you would lose (140.00) from holding Alphatec Holdings or give up 11.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Alphatec Holdings  vs.  Align Technology

Alphatec Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphatec Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Align Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Align Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alphatec Holdings and Align Technology

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

The idea behind Alphatec Holdings and Align Technology 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.