Correlation Between Alvotech and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Alvotech and Playa Hotels 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 Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Playa Hotels Resorts, you can compare the effects of market volatilities on Alvotech and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Playa Hotels.
Diversification Opportunities for Alvotech and Playa Hotels
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alvotech and Playa is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Alvotech i.e., Alvotech and Playa Hotels go up and down completely randomly.
Pair Corralation between Alvotech and Playa Hotels
Given the investment horizon of 90 days Alvotech is expected to under-perform the Playa Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 1.16 times less risky than Playa Hotels. The stock trades about -0.26 of its potential returns per unit of risk. The Playa Hotels Resorts is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 863.00 in Playa Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 117.00 from holding Playa Hotels Resorts or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Playa Hotels Resorts
Performance |
| Timeline |
| Alvotech |
| Playa Hotels Resorts |
Alvotech and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Playa Hotels
The main advantage of trading using opposite Alvotech and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Alvotech vs. Candel Therapeutics | Alvotech vs. Cingulate Warrants | Alvotech vs. Unicycive Therapeutics | Alvotech vs. Cardio Diagnostics Holdings |
| Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited | Playa Hotels vs. TripAdvisor | Playa Hotels vs. Thayer Ventures Acquisition |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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