Correlation Between Monogram Orthopaedics and Alphatec Holdings

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

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

Diversification Opportunities for Monogram Orthopaedics and Alphatec Holdings

-0.46

Correlation Coefficient

Monogram Orthopaedics  Alphatec Holdings

Very good diversification

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

Pair Corralation between Monogram Orthopaedics and Alphatec Holdings

Given the investment horizon of 90 days Monogram Orthopaedics Common is expected to generate 4.26 times more return on investment than Alphatec Holdings. However, Monogram Orthopaedics is 4.26 times more volatile than Alphatec Holdings. It trades about 0.15 of its potential returns per unit of risk. Alphatec Holdings is currently generating about -0.04 per unit of risk. If you would invest  270.00  in Monogram Orthopaedics Common on April 23, 2025 and sell it today you would earn a total of  299.00  from holding Monogram Orthopaedics Common or generate 110.74% return on investment over 90 days.

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

Monogram Orthopaedics Common  vs.  Alphatec Holdings

Monogram Orthopaedics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monogram Orthopaedics Common are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Monogram Orthopaedics displayed solid returns over the last few months and may actually be approaching a breakup point.

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 weak 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.

Pair Trading with Monogram Orthopaedics and Alphatec Holdings

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

The idea behind Monogram Orthopaedics Common and Alphatec Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.