Correlation Between Electrocore LLC and Alignment Healthcare

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

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

Diversification Opportunities for Electrocore LLC and Alignment Healthcare

-0.89

Correlation Coefficient

Electrocore LLC  Alignment Healthcare

Pay attention - limited upside

The 3 months correlation between Electrocore and Alignment is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC 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 Electrocore LLC 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 Electrocore LLC 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 Electrocore LLC i.e., Electrocore LLC and Alignment Healthcare go up and down completely randomly.

Pair Corralation between Electrocore LLC and Alignment Healthcare

Given the investment horizon of 90 days Electrocore LLC is expected to generate 2.06 times less return on investment than Alignment Healthcare. In addition to that, Electrocore LLC is 1.12 times more volatile than Alignment Healthcare LLC. It trades about 0.03 of its total potential returns per unit of risk. Alignment Healthcare LLC is currently generating about 0.06 per unit of volatility. If you would invest  685.00  in Alignment Healthcare LLC on February 5, 2025 and sell it today you would earn a total of  863.00  from holding Alignment Healthcare LLC or generate 125.99% return on investment over 90 days.

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

Electrocore LLC  vs.  Alignment Healthcare LLC

Electrocore LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electrocore LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Alignment Healthcare LLC

Risk-Adjusted Performance

Weak

Over the last 90 days Alignment Healthcare LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Alignment Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Electrocore LLC and Alignment Healthcare

The main advantage of trading using opposite Electrocore LLC and Alignment Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC 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 Electrocore LLC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.