Correlation Between Alvotech and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Alvotech and Asbury Automotive 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 Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Asbury Automotive Group, you can compare the effects of market volatilities on Alvotech and Asbury Automotive 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 Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Asbury Automotive.
Diversification Opportunities for Alvotech and Asbury Automotive
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alvotech and Asbury is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive 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 Asbury Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asbury Automotive has no effect on the direction of Alvotech i.e., Alvotech and Asbury Automotive go up and down completely randomly.
Pair Corralation between Alvotech and Asbury Automotive
Given the investment horizon of 90 days Alvotech is expected to under-perform the Asbury Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 1.18 times less risky than Asbury Automotive. The stock trades about -0.06 of its potential returns per unit of risk. The Asbury Automotive Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 23,773 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 2,210 from holding Asbury Automotive Group or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Asbury Automotive Group
Performance |
| Timeline |
| Alvotech |
| Asbury Automotive |
Alvotech and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Asbury Automotive
The main advantage of trading using opposite Alvotech and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Asbury Automotive 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 Asbury Automotive will offset losses from the drop in Asbury Automotive's long position.| Alvotech vs. Intracellular Th | Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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