Correlation Between Alphatec Holdings and OraSure Technologies

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

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

Diversification Opportunities for Alphatec Holdings and OraSure Technologies

-0.79

Correlation Coefficient

Alphatec Holdings  OraSure Technologies

Pay attention - limited upside

The 3 months correlation between Alphatec and OraSure is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alphatec Holdings and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies 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 OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of Alphatec Holdings i.e., Alphatec Holdings and OraSure Technologies go up and down completely randomly.

Pair Corralation between Alphatec Holdings and OraSure Technologies

Given the investment horizon of 90 days Alphatec Holdings is expected to generate 11.96 times less return on investment than OraSure Technologies. But when comparing it to its historical volatility, Alphatec Holdings is 1.36 times less risky than OraSure Technologies. It trades about 0.01 of its potential returns per unit of risk. OraSure Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  294.00  in OraSure Technologies on May 1, 2025 and sell it today you would earn a total of  33.00  from holding OraSure Technologies or generate 11.22% return on investment over 90 days.

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

Alphatec Holdings  vs.  OraSure Technologies

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 rather sound technical and fundamental indicators, Alphatec Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

OraSure Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OraSure Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, OraSure Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphatec Holdings and OraSure Technologies

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

The idea behind Alphatec Holdings and OraSure Technologies 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.