Correlation Between Alvotech and 51Talk Online

Can any of the company-specific risk be diversified away by investing in both Alvotech and 51Talk Online 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 Alvotech and 51Talk Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alvotech and 51Talk Online Education, you can compare the effects of market volatilities on Alvotech and 51Talk Online 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 Alvotech with a short position of 51Talk Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and 51Talk Online.

Diversification Opportunities for Alvotech and 51Talk Online

-0.27

Correlation Coefficient

Alvotech  51Talk Online

Very good diversification

The 3 months correlation between Alvotech and 51Talk is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and 51Talk Online Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 51Talk Online Education and Alvotech 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 Alvotech are associated (or correlated) with 51Talk Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 51Talk Online Education has no effect on the direction of Alvotech i.e., Alvotech and 51Talk Online go up and down completely randomly.

Pair Corralation between Alvotech and 51Talk Online

Given the investment horizon of 90 days Alvotech is expected to generate 0.44 times more return on investment than 51Talk Online. However, Alvotech is 2.29 times less risky than 51Talk Online. It trades about 0.03 of its potential returns per unit of risk. 51Talk Online Education is currently generating about -0.02 per unit of risk. If you would invest  1,135  in Alvotech on September 5, 2024 and sell it today you would earn a total of  26.00  from holding Alvotech or generate 2.29% return on investment over 90 days.

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

Alvotech  vs.  51Talk Online Education

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 latest stock price disarray, may contribute to short-term losses for the investors.

51Talk Online Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 51Talk Online Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 51Talk Online is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Alvotech and 51Talk Online

The main advantage of trading using opposite Alvotech and 51Talk Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, 51Talk Online 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 51Talk Online will offset losses from the drop in 51Talk Online's long position.

The idea behind Alvotech and 51Talk Online Education 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 Transaction History module to view history of all your transactions and understand their impact on performance.