Correlation Between Dalata Hotel and Alvotech

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

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

Diversification Opportunities for Dalata Hotel and Alvotech

0.0

Correlation Coefficient

Dalata Hotel  Alvotech

Pay attention - limited upside

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

Pair Corralation between Dalata Hotel and Alvotech

Assuming the 90 days horizon Dalata Hotel is expected to generate 1.48 times less return on investment than Alvotech. But when comparing it to its historical volatility, Dalata Hotel Group is 25.41 times less risky than Alvotech. It trades about 0.09 of its potential returns per unit of risk. Alvotech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,202  in Alvotech on September 24, 2024 and sell it today you would lose (11.00) from holding Alvotech or give up 0.92% of portfolio value over 90 days.

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

Dalata Hotel Group  vs.  Alvotech

Dalata Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 unsteady basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dalata Hotel and Alvotech

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

The idea behind Dalata Hotel Group and Alvotech 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.