Correlation Between Alvotech and 437076BD3

Can any of the company-specific risk be diversified away by investing in both Alvotech and 437076BD3 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 437076BD3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alvotech and HOME DEPOT INC, you can compare the effects of market volatilities on Alvotech and 437076BD3 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 437076BD3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and 437076BD3.

Diversification Opportunities for Alvotech and 437076BD3

-0.64

Correlation Coefficient

Alvotech  437076BD3

Excellent diversification

The 3 months correlation between Alvotech and 437076BD3 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and HOME DEPOT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT INC 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 437076BD3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT INC has no effect on the direction of Alvotech i.e., Alvotech and 437076BD3 go up and down completely randomly.

Pair Corralation between Alvotech and 437076BD3

Given the investment horizon of 90 days Alvotech is expected to generate 1.34 times more return on investment than 437076BD3. However, Alvotech is 1.34 times more volatile than HOME DEPOT INC. It trades about 0.03 of its potential returns per unit of risk. HOME DEPOT INC is currently generating about -0.05 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	Weak
Accuracy	93.75%
Values	Daily Returns

Alvotech  vs.  HOME DEPOT INC

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.

HOME DEPOT INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOME DEPOT INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 437076BD3 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alvotech and 437076BD3

The main advantage of trading using opposite Alvotech and 437076BD3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, 437076BD3 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 437076BD3 will offset losses from the drop in 437076BD3's long position.

The idea behind Alvotech and HOME DEPOT INC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.