Correlation Between Golden Heaven and Alvotech
Can any of the company-specific risk be diversified away by investing in both Golden Heaven 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 Golden Heaven and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Heaven Group and Alvotech, you can compare the effects of market volatilities on Golden Heaven 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 Golden Heaven with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Heaven and Alvotech.
Diversification Opportunities for Golden Heaven and Alvotech
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Alvotech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Golden Heaven Group and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Golden Heaven 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 Golden Heaven 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 Golden Heaven i.e., Golden Heaven and Alvotech go up and down completely randomly.
Pair Corralation between Golden Heaven and Alvotech
Given the investment horizon of 90 days Golden Heaven Group is expected to under-perform the Alvotech. In addition to that, Golden Heaven is 3.77 times more volatile than Alvotech. It trades about -0.13 of its total potential returns per unit of risk. Alvotech is currently generating about -0.04 per unit of volatility. If you would invest 1,150 in Alvotech on December 4, 2024 and sell it today you would lose (72.00) from holding Alvotech or give up 6.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Golden Heaven Group vs. Alvotech
Performance |
Timeline |
Golden Heaven Group |
Alvotech |
Golden Heaven and Alvotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Heaven and Alvotech
The main advantage of trading using opposite Golden Heaven and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Heaven 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.Golden Heaven vs. Ameriprise Financial | Golden Heaven vs. Eddy Smart Home | Golden Heaven vs. City Office REIT | Golden Heaven vs. Autohome |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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