Correlation Between 04686JAE1 and Alvotech

Can any of the company-specific risk be diversified away by investing in both 04686JAE1 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 04686JAE1 and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATH 345 15 MAY 52 and Alvotech, you can compare the effects of market volatilities on 04686JAE1 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 04686JAE1 with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04686JAE1 and Alvotech.

Diversification Opportunities for 04686JAE1 and Alvotech

-0.23

Correlation Coefficient

04686JAE1  Alvotech

Very good diversification

The 3 months correlation between 04686JAE1 and Alvotech is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ATH 345 15 MAY 52 and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and 04686JAE1 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 ATH 345 15 MAY 52 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 04686JAE1 i.e., 04686JAE1 and Alvotech go up and down completely randomly.

Pair Corralation between 04686JAE1 and Alvotech

Assuming the 90 days trading horizon 04686JAE1 is expected to generate 6.72 times less return on investment than Alvotech. But when comparing it to its historical volatility, ATH 345 15 MAY 52 is 1.01 times less risky than Alvotech. It trades about 0.02 of its potential returns per unit of risk. Alvotech is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,221  in Alvotech on October 10, 2024 and sell it today you would earn a total of  104.00  from holding Alvotech or generate 8.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

ATH 345 15 MAY 52  vs.  Alvotech

ATH 345 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATH 345 15 MAY 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 04686JAE1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Alvotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Alvotech is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 04686JAE1 and Alvotech

The main advantage of trading using opposite 04686JAE1 and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04686JAE1 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 ATH 345 15 MAY 52 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.