Correlation Between Alvotech and Willamette Valley

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

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

Diversification Opportunities for Alvotech and Willamette Valley

0.22

Correlation Coefficient

Alvotech  Willamette Valley

Modest diversification

The 3 months correlation between Alvotech and Willamette is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Alvotech i.e., Alvotech and Willamette Valley go up and down completely randomly.

Pair Corralation between Alvotech and Willamette Valley

Given the investment horizon of 90 days Alvotech is expected to generate 1.56 times more return on investment than Willamette Valley. However, Alvotech is 1.56 times more volatile than Willamette Valley Vineyards. It trades about 0.03 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.05 per unit of risk. If you would invest  1,001  in Alvotech on September 23, 2024 and sell it today you would earn a total of  190.00  from holding Alvotech or generate 18.98% 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.  Willamette Valley Vineyards

Alvotech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Willamette Valley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Willamette Valley Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Willamette Valley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alvotech and Willamette Valley

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

The idea behind Alvotech and Willamette Valley Vineyards 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.