Correlation Between Outset Medical and Alphatec Holdings

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

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

Diversification Opportunities for Outset Medical and Alphatec Holdings

-0.81

Correlation Coefficient

Outset Medical  Alphatec Holdings

Pay attention - limited upside

The 3 months correlation between Outset and Alphatec is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings and Outset Medical 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 Outset Medical 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 Outset Medical i.e., Outset Medical and Alphatec Holdings go up and down completely randomly.

Pair Corralation between Outset Medical and Alphatec Holdings

Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Alphatec Holdings. In addition to that, Outset Medical is 1.06 times more volatile than Alphatec Holdings. It trades about -0.08 of its total potential returns per unit of risk. Alphatec Holdings is currently generating about 0.11 per unit of volatility. If you would invest  1,232  in Alphatec Holdings on May 27, 2025 and sell it today you would earn a total of  352.00  from holding Alphatec Holdings or generate 28.57% return on investment over 90 days.

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

Outset Medical  vs.  Alphatec Holdings

Outset Medical

Risk-Adjusted Performance

Weakest

Over the last 90 days Outset Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Alphatec Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alphatec Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Alphatec Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outset Medical and Alphatec Holdings

The main advantage of trading using opposite Outset Medical and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical 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 Outset Medical 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.

Check out your portfolio center.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.