Correlation Between Alpha Tau and Accuray Incorporated

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

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

Diversification Opportunities for Alpha Tau and Accuray Incorporated

0.7

Correlation Coefficient

Alpha Tau  Accuray Incorporated

Poor diversification

The 3 months correlation between Alpha and Accuray is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Tau Medical and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Alpha Tau 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 Alpha Tau Medical are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Alpha Tau i.e., Alpha Tau and Accuray Incorporated go up and down completely randomly.

Pair Corralation between Alpha Tau and Accuray Incorporated

Given the investment horizon of 90 days Alpha Tau Medical is expected to generate 0.49 times more return on investment than Accuray Incorporated. However, Alpha Tau Medical is 2.04 times less risky than Accuray Incorporated. It trades about -0.08 of its potential returns per unit of risk. Accuray Incorporated is currently generating about -0.14 per unit of risk. If you would invest  303.00  in Alpha Tau Medical on March 7, 2024 and sell it today you would lose (39.00) from holding Alpha Tau Medical or give up 12.87% of portfolio value over 90 days.

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

Alpha Tau Medical  vs.  Accuray Incorporated

Alpha Tau Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Tau Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Accuray Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accuray Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alpha Tau and Accuray Incorporated

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

The idea behind Alpha Tau Medical and Accuray Incorporated 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.