Correlation Between Alignment Healthcare and Werewolf Therapeutics

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

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

Diversification Opportunities for Alignment Healthcare and Werewolf Therapeutics

-0.46

Correlation Coefficient

Alignment Healthcare  Werewolf Therapeutics

Very good diversification

The 3 months correlation between Alignment and Werewolf is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and Alignment Healthcare 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 Alignment Healthcare LLC are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of Alignment Healthcare i.e., Alignment Healthcare and Werewolf Therapeutics go up and down completely randomly.

Pair Corralation between Alignment Healthcare and Werewolf Therapeutics

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to under-perform the Werewolf Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Alignment Healthcare LLC is 1.86 times less risky than Werewolf Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Werewolf Therapeutics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  80.00  in Werewolf Therapeutics on May 9, 2025 and sell it today you would earn a total of  39.00  from holding Werewolf Therapeutics or generate 48.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alignment Healthcare LLC  vs.  Werewolf Therapeutics

Alignment Healthcare LLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Alignment Healthcare LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Werewolf Therapeutics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Werewolf Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Werewolf Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alignment Healthcare and Werewolf Therapeutics

The main advantage of trading using opposite Alignment Healthcare and Werewolf Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alignment Healthcare position performs unexpectedly, Werewolf 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 Werewolf Therapeutics will offset losses from the drop in Werewolf Therapeutics' long position.

The idea behind Alignment Healthcare LLC and Werewolf Therapeutics 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.