Correlation Between Air Lease and Alvotech
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Alvotech, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Alvotech.
Diversification Opportunities for Air Lease and Alvotech
Average diversification
The 3 months correlation between Air and Alvotech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Alvotech go up and down completely randomly.
Pair Corralation between Air Lease and Alvotech
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.03 times more return on investment than Alvotech. However, Air Lease is 1.03 times more volatile than Alvotech. It trades about 0.33 of its potential returns per unit of risk. Alvotech is currently generating about -0.09 per unit of risk. If you would invest 4,396 in Air Lease on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Air Lease or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Alvotech
Performance |
| Timeline |
| Air Lease |
| Alvotech |
Air Lease and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Alvotech
The main advantage of trading using opposite Air Lease and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Alvotech vs. Intracellular Th | Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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