Correlation Between Figs and Alignment Healthcare

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

By analyzing existing cross correlation between Figs Inc and Alignment Healthcare LLC, you can compare the effects of market volatilities on Figs and Alignment Healthcare 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 Figs with a short position of Alignment Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Alignment Healthcare.

Diversification Opportunities for Figs and Alignment Healthcare

-0.8

Correlation Coefficient

Figs  Alignment Healthcare

Pay attention - limited upside

The 3 months correlation between Figs and Alignment is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Alignment Healthcare LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alignment Healthcare LLC and Figs 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 Figs Inc are associated (or correlated) with Alignment Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alignment Healthcare LLC has no effect on the direction of Figs i.e., Figs and Alignment Healthcare go up and down completely randomly.

Pair Corralation between Figs and Alignment Healthcare

Given the investment horizon of 90 days Figs Inc is expected to under-perform the Alignment Healthcare. In addition to that, Figs is 1.22 times more volatile than Alignment Healthcare LLC. It trades about -0.12 of its total potential returns per unit of risk. Alignment Healthcare LLC is currently generating about 0.22 per unit of volatility. If you would invest  1,188  in Alignment Healthcare LLC on January 10, 2025 and sell it today you would earn a total of  666.00  from holding Alignment Healthcare LLC or generate 56.06% return on investment over 90 days.

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

Figs Inc  vs.  Alignment Healthcare LLC

Figs Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alignment Healthcare LLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alignment Healthcare LLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, Alignment Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Figs and Alignment Healthcare

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

The idea behind Figs Inc and Alignment Healthcare LLC 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.