Correlation Between Alvotech and Foghorn Therapeutics
Can any of the company-specific risk be diversified away by investing in both Alvotech and Foghorn Therapeutics 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 Foghorn Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Foghorn Therapeutics, you can compare the effects of market volatilities on Alvotech and Foghorn Therapeutics 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 Foghorn Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Foghorn Therapeutics.
Diversification Opportunities for Alvotech and Foghorn Therapeutics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alvotech and Foghorn is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Foghorn Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foghorn Therapeutics 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 Foghorn Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foghorn Therapeutics has no effect on the direction of Alvotech i.e., Alvotech and Foghorn Therapeutics go up and down completely randomly.
Pair Corralation between Alvotech and Foghorn Therapeutics
Given the investment horizon of 90 days Alvotech is expected to under-perform the Foghorn Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 2.98 times less risky than Foghorn Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Foghorn Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Foghorn Therapeutics on August 24, 2024 and sell it today you would earn a total of 192.00 from holding Foghorn Therapeutics or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Foghorn Therapeutics
Performance |
| Timeline |
| Alvotech |
| Foghorn Therapeutics |
Alvotech and Foghorn Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Foghorn Therapeutics
The main advantage of trading using opposite Alvotech and Foghorn Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Foghorn Therapeutics 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 Foghorn Therapeutics will offset losses from the drop in Foghorn Therapeutics' long position.| Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. ANI Pharmaceuticals | Alvotech vs. Alkermes Plc |
| Foghorn Therapeutics vs. ZyVersa Therapeutics | Foghorn Therapeutics vs. Sonnet Biotherapeutics Holdings | Foghorn Therapeutics vs. Zura Bio Limited | Foghorn Therapeutics vs. Phio Pharmaceuticals Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |