Correlation Between 17252MAP5 and Alvotech

Can any of the company-specific risk be diversified away by investing in both 17252MAP5 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 17252MAP5 and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTAS 345 01 MAY 25 and Alvotech, you can compare the effects of market volatilities on 17252MAP5 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 17252MAP5 with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 17252MAP5 and Alvotech.

Diversification Opportunities for 17252MAP5 and Alvotech

0.26

Correlation Coefficient

17252MAP5  Alvotech

Modest diversification

The 3 months correlation between 17252MAP5 and Alvotech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CTAS 345 01 MAY 25 and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and 17252MAP5 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 CTAS 345 01 MAY 25 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 17252MAP5 i.e., 17252MAP5 and Alvotech go up and down completely randomly.

Pair Corralation between 17252MAP5 and Alvotech

Assuming the 90 days trading horizon CTAS 345 01 MAY 25 is expected to under-perform the Alvotech. But the bond apears to be less risky and, when comparing its historical volatility, CTAS 345 01 MAY 25 is 7.73 times less risky than Alvotech. The bond trades about -0.05 of its potential returns per unit of risk. The Alvotech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,135  in Alvotech on September 2, 2024 and sell it today you would earn a total of  40.00  from holding Alvotech or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.56%
Values	Daily Returns

CTAS 345 01 MAY 25  vs.  Alvotech

CTAS 345 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTAS 345 01 MAY 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 17252MAP5 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 3 (%) 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 17252MAP5 and Alvotech

The main advantage of trading using opposite 17252MAP5 and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 17252MAP5 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 CTAS 345 01 MAY 25 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.