Correlation Between Nuvation Bio and Alvotech Warrant

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

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

Diversification Opportunities for Nuvation Bio and Alvotech Warrant

0.76

Correlation Coefficient

Nuvation Bio  Alvotech Warrant

Poor diversification

The 3 months correlation between Nuvation and Alvotech is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Alvotech Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech Warrant and Nuvation Bio 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 Nuvation Bio are associated (or correlated) with Alvotech Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech Warrant has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Alvotech Warrant go up and down completely randomly.

Pair Corralation between Nuvation Bio and Alvotech Warrant

Given the investment horizon of 90 days Nuvation Bio is expected to generate 0.41 times more return on investment than Alvotech Warrant. However, Nuvation Bio is 2.41 times less risky than Alvotech Warrant. It trades about -0.09 of its potential returns per unit of risk. Alvotech Warrant is currently generating about -0.04 per unit of risk. If you would invest  262.00  in Nuvation Bio on December 30, 2024 and sell it today you would lose (80.00) from holding Nuvation Bio or give up 30.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Nuvation Bio  vs.  Alvotech Warrant

Nuvation Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuvation Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alvotech Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvotech Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Nuvation Bio and Alvotech Warrant

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

The idea behind Nuvation Bio and Alvotech Warrant 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.