Correlation Between Alvotech and Altimar Acquisition

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

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

Diversification Opportunities for Alvotech and Altimar Acquisition

0.0

Correlation Coefficient

Alvotech  Altimar Acquisition

Pay attention - limited upside

The 3 months correlation between Alvotech and Altimar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and Alvotech 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 Alvotech are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of Alvotech i.e., Alvotech and Altimar Acquisition go up and down completely randomly.

Pair Corralation between Alvotech and Altimar Acquisition

Given the investment horizon of 90 days Alvotech is expected to generate 738.67 times less return on investment than Altimar Acquisition. But when comparing it to its historical volatility, Alvotech is 43.57 times less risky than Altimar Acquisition. It trades about 0.02 of its potential returns per unit of risk. Altimar Acquisition Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1.10  in Altimar Acquisition Corp on October 25, 2024 and sell it today you would earn a total of  3.90  from holding Altimar Acquisition Corp or generate 354.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.05%
Values	Daily Returns

Alvotech  vs.  Altimar Acquisition Corp

Alvotech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Alvotech is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Altimar Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimar Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altimar Acquisition is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alvotech and Altimar Acquisition

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

The idea behind Alvotech and Altimar Acquisition Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.