Correlation Between CTS and Alphatec Holdings
Can any of the company-specific risk be diversified away by investing in both CTS 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 CTS and Alphatec Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Corporation and Alphatec Holdings, you can compare the effects of market volatilities on CTS 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 CTS with a short position of Alphatec Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS and Alphatec Holdings.
Diversification Opportunities for CTS and Alphatec Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTS and Alphatec is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings and CTS 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 CTS Corporation 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 CTS i.e., CTS and Alphatec Holdings go up and down completely randomly.
Pair Corralation between CTS and Alphatec Holdings
Considering the 90-day investment horizon CTS Corporation is expected to generate 0.69 times more return on investment than Alphatec Holdings. However, CTS Corporation is 1.45 times less risky than Alphatec Holdings. It trades about -0.01 of its potential returns per unit of risk. Alphatec Holdings is currently generating about -0.01 per unit of risk. If you would invest 4,181 in CTS Corporation on April 16, 2025 and sell it today you would lose (27.00) from holding CTS Corporation or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTS Corp. vs. Alphatec Holdings
Performance |
| Timeline |
| CTS Corporation |
| Alphatec Holdings |
CTS and Alphatec Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS and Alphatec Holdings
The main advantage of trading using opposite CTS and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS 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 CTS Corporation 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.| Alphatec Holdings vs. Orthofix Medical | Alphatec Holdings vs. Si Bone | Alphatec Holdings vs. Avanos Medical | Alphatec Holdings vs. AtriCure |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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