Correlation Between Alvotech and Uber Technologies

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

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

Diversification Opportunities for Alvotech and Uber Technologies

0.2

Correlation Coefficient

Alvotech  Uber Technologies

Modest diversification

The 3 months correlation between Alvotech and Uber is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Alvotech i.e., Alvotech and Uber Technologies go up and down completely randomly.

Pair Corralation between Alvotech and Uber Technologies

Given the investment horizon of 90 days Alvotech is expected to generate 2.68 times less return on investment than Uber Technologies. In addition to that, Alvotech is 1.18 times more volatile than Uber Technologies. It trades about 0.02 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.08 per unit of volatility. If you would invest  3,036  in Uber Technologies on October 11, 2024 and sell it today you would earn a total of  3,455  from holding Uber Technologies or generate 113.8% return on investment over 90 days.

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

Alvotech  vs.  Uber Technologies

Alvotech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uber Technologies 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 technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Alvotech and Uber Technologies

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

The idea behind Alvotech and Uber Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.