Correlation Between Murano Global and Alvotech

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

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

Diversification Opportunities for Murano Global and Alvotech

-0.38

Correlation Coefficient

Murano Global  Alvotech

Very good diversification

The 3 months correlation between Murano and Alvotech is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Murano Global Investments and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Murano Global 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 Murano Global Investments 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 Murano Global i.e., Murano Global and Alvotech go up and down completely randomly.

Pair Corralation between Murano Global and Alvotech

Given the investment horizon of 90 days Murano Global is expected to generate 4.08 times less return on investment than Alvotech. In addition to that, Murano Global is 1.95 times more volatile than Alvotech. It trades about 0.06 of its total potential returns per unit of risk. Alvotech is currently generating about 0.48 per unit of volatility. If you would invest  1,149  in Alvotech on October 11, 2024 and sell it today you would earn a total of  176.00  from holding Alvotech or generate 15.32% return on investment over 90 days.

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

Murano Global Investments  vs.  Alvotech

Murano Global Investments

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Murano Global Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Murano Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Alvotech

Risk-Adjusted Performance

5 of 100

Weak

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.

Pair Trading with Murano Global and Alvotech

The main advantage of trading using opposite Murano Global and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murano Global 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 Murano Global Investments 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.