Correlation Between EngageSmart LLC and Alvotech

Can any of the company-specific risk be diversified away by investing in both EngageSmart LLC 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 EngageSmart LLC and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EngageSmart LLC and Alvotech, you can compare the effects of market volatilities on EngageSmart LLC 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 EngageSmart LLC with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EngageSmart LLC and Alvotech.

Diversification Opportunities for EngageSmart LLC and Alvotech

0.01

Correlation Coefficient

EngageSmart LLC  Alvotech

Significant diversification

The 3 months correlation between EngageSmart and Alvotech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding EngageSmart LLC and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and EngageSmart LLC 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 EngageSmart LLC 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 EngageSmart LLC i.e., EngageSmart LLC and Alvotech go up and down completely randomly.

Pair Corralation between EngageSmart LLC and Alvotech

Given the investment horizon of 90 days EngageSmart LLC is expected to generate 0.03 times more return on investment than Alvotech. However, EngageSmart LLC is 39.68 times less risky than Alvotech. It trades about -0.49 of its potential returns per unit of risk. Alvotech is currently generating about -0.04 per unit of risk. If you would invest  2,309  in EngageSmart LLC on January 20, 2024 and sell it today you would lose (4.00) from holding EngageSmart LLC or give up 0.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	8.06%
Values	Daily Returns

EngageSmart LLC  vs.  Alvotech

EngageSmart LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EngageSmart LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, EngageSmart LLC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Alvotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with EngageSmart LLC and Alvotech

The main advantage of trading using opposite EngageSmart LLC and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EngageSmart LLC 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.

The idea behind EngageSmart LLC and Alvotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.