Correlation Between Spring Valley and Alvotech
Can any of the company-specific risk be diversified away by investing in both Spring Valley 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 Spring Valley and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and Alvotech, you can compare the effects of market volatilities on Spring Valley 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 Spring Valley with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Alvotech.
Diversification Opportunities for Spring Valley and Alvotech
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spring and Alvotech is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and Alvotech go up and down completely randomly.
Pair Corralation between Spring Valley and Alvotech
Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 33.21 times more return on investment than Alvotech. However, Spring Valley is 33.21 times more volatile than Alvotech. It trades about 0.08 of its potential returns per unit of risk. Alvotech is currently generating about 0.05 per unit of risk. If you would invest 9.72 in Spring Valley Acquisition on September 2, 2024 and sell it today you would lose (2.71) from holding Spring Valley Acquisition or give up 27.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 60.89% |
| Values | Daily Returns |
Spring Valley Acquisition vs. Alvotech
Performance |
| Timeline |
| Spring Valley Acquisition |
| Alvotech |
Spring Valley and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and Alvotech
The main advantage of trading using opposite Spring Valley and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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.| Spring Valley vs. Alvotech | Spring Valley vs. Agnico Eagle Mines | Spring Valley vs. ACG Metals Limited | Spring Valley vs. RadNet Inc |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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