Correlation Between Altair Engineering and Alvotech
Can any of the company-specific risk be diversified away by investing in both Altair Engineering 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 Altair Engineering and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altair Engineering and Alvotech, you can compare the effects of market volatilities on Altair Engineering 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 Altair Engineering with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altair Engineering and Alvotech.
Diversification Opportunities for Altair Engineering and Alvotech
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altair and Alvotech is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Altair Engineering and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Altair Engineering 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 Altair Engineering 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 Altair Engineering i.e., Altair Engineering and Alvotech go up and down completely randomly.
Pair Corralation between Altair Engineering and Alvotech
Given the investment horizon of 90 days Altair Engineering is expected to generate 4.59 times less return on investment than Alvotech. But when comparing it to its historical volatility, Altair Engineering is 7.81 times less risky than Alvotech. It trades about 0.46 of its potential returns per unit of risk. Alvotech is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,256 in Alvotech on October 25, 2024 and sell it today you would earn a total of 73.00 from holding Alvotech or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altair Engineering vs. Alvotech
Performance |
| Timeline |
| Altair Engineering |
| Alvotech |
Altair Engineering and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altair Engineering and Alvotech
The main advantage of trading using opposite Altair Engineering and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair Engineering 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.| Altair Engineering vs. Global Blue Group | Altair Engineering vs. EverCommerce | Altair Engineering vs. CSG Systems International | Altair Engineering vs. Consensus Cloud Solutions |
| Alvotech vs. Intracellular Th | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics | Alvotech vs. ANI Pharmaceuticals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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