Correlation Between Alphatec Holdings and ECD Automotive

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

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

Diversification Opportunities for Alphatec Holdings and ECD Automotive

-0.33

Correlation Coefficient

Alphatec Holdings  ECD Automotive

Very good diversification

The 3 months correlation between Alphatec and ECD is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and ECD Automotive Design in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECD Automotive Design 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 ECD Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECD Automotive Design has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and ECD Automotive go up and down completely randomly.

Pair Corralation between Alphatec Holdings and ECD Automotive

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 0.54 times more return on investment than ECD Automotive. However, Alphatec Holdings is 1.84 times less risky than ECD Automotive. It trades about 0.1 of its potential returns per unit of risk. ECD Automotive Design is currently generating about -0.11 per unit of risk. If you would invest  1,274  in Alphatec Holdings on May 15, 2025 and sell it today you would earn a total of  306.00  from holding Alphatec Holdings or generate 24.02% return on investment over 90 days.

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

Alphatec Holdings  vs.  ECD Automotive Design

Alphatec Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 7 (%) 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.

ECD Automotive Design

Risk-Adjusted Performance

Weakest

Over the last 90 days ECD Automotive Design has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alphatec Holdings and ECD Automotive

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

The idea behind Alphatec Holdings and ECD Automotive Design 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.