Correlation Between Alphatec Holdings and CONMED

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

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

Diversification Opportunities for Alphatec Holdings and CONMED

0.6

Correlation Coefficient

Alphatec Holdings  CONMED

Poor diversification

The 3 months correlation between Alphatec and CONMED is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED 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 CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and CONMED go up and down completely randomly.

Pair Corralation between Alphatec Holdings and CONMED

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 1.21 times more return on investment than CONMED. However, Alphatec Holdings is 1.21 times more volatile than CONMED. It trades about -0.04 of its potential returns per unit of risk. CONMED is currently generating about -0.19 per unit of risk. If you would invest  1,161  in Alphatec Holdings on January 18, 2025 and sell it today you would lose (138.00) from holding Alphatec Holdings or give up 11.89% of portfolio value over 90 days.

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

Alphatec Holdings  vs.  CONMED

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 unsteady 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.

CONMED

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONMED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Alphatec Holdings and CONMED

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

The idea behind Alphatec Holdings and CONMED 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.