Correlation Between Osaka Steel and Alvotech

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

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

Diversification Opportunities for Osaka Steel and Alvotech

0.3

Correlation Coefficient

Osaka Steel  Alvotech

Weak diversification

The 3 months correlation between Osaka and Alvotech is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Osaka Steel Co, and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Osaka Steel 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 Osaka Steel Co, 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 Osaka Steel i.e., Osaka Steel and Alvotech go up and down completely randomly.

Pair Corralation between Osaka Steel and Alvotech

Assuming the 90 days horizon Osaka Steel Co, is expected to under-perform the Alvotech. In addition to that, Osaka Steel is 9.97 times more volatile than Alvotech. It trades about -0.13 of its total potential returns per unit of risk. Alvotech is currently generating about -0.14 per unit of volatility. If you would invest  1,302  in Alvotech on December 29, 2024 and sell it today you would lose (266.00) from holding Alvotech or give up 20.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Osaka Steel Co,  vs.  Alvotech

Osaka Steel Co,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Osaka Steel Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Alvotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Osaka Steel and Alvotech

The main advantage of trading using opposite Osaka Steel and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osaka Steel 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 Osaka Steel Co, 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.