Correlation Between Alphatec Holdings and Masimo

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

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

Diversification Opportunities for Alphatec Holdings and Masimo

-0.46

Correlation Coefficient

Alphatec Holdings  Masimo

Very good diversification

The 3 months correlation between Alphatec and Masimo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and Masimo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masimo 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 Masimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masimo has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and Masimo go up and down completely randomly.

Pair Corralation between Alphatec Holdings and Masimo

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 1.82 times more return on investment than Masimo. However, Alphatec Holdings is 1.82 times more volatile than Masimo. It trades about 0.08 of its potential returns per unit of risk. Masimo is currently generating about -0.06 per unit of risk. If you would invest  1,272  in Alphatec Holdings on May 13, 2025 and sell it today you would earn a total of  225.00  from holding Alphatec Holdings or generate 17.69% return on investment over 90 days.

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

Alphatec Holdings  vs.  Masimo

Alphatec Holdings

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 6 (%) 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.

Masimo

Risk-Adjusted Performance

Weakest

Over the last 90 days Masimo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Alphatec Holdings and Masimo

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

The idea behind Alphatec Holdings and Masimo 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.