Correlation Between Alvotech and Investment

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

By analyzing existing cross correlation between Alvotech and Investment AB Latour, you can compare the effects of market volatilities on Alvotech and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Investment.

Diversification Opportunities for Alvotech and Investment

0.0

Correlation Coefficient

Alvotech  Investment

Pay attention - limited upside

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

Pair Corralation between Alvotech and Investment

Given the investment horizon of 90 days Alvotech is expected to generate 2.11 times less return on investment than Investment. In addition to that, Alvotech is 1.81 times more volatile than Investment AB Latour. It trades about 0.02 of its total potential returns per unit of risk. Investment AB Latour is currently generating about 0.07 per unit of volatility. If you would invest  1,457  in Investment AB Latour on October 10, 2024 and sell it today you would earn a total of  999.00  from holding Investment AB Latour or generate 68.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alvotech  vs.  Investment AB Latour

Alvotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 2 (%) 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.

Investment AB Latour

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment AB Latour has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Investment 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 Investment

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

The idea behind Alvotech and Investment AB Latour 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.