Correlation Between Alvotech and CDW Corp

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

By analyzing existing cross correlation between Alvotech and CDW Corp, you can compare the effects of market volatilities on Alvotech and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and CDW Corp.

Diversification Opportunities for Alvotech and CDW Corp

0.58

Correlation Coefficient

Alvotech  CDW Corp

Very weak diversification

The 3 months correlation between Alvotech and CDW is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Alvotech i.e., Alvotech and CDW Corp go up and down completely randomly.

Pair Corralation between Alvotech and CDW Corp

Given the investment horizon of 90 days Alvotech is expected to generate 2.06 times more return on investment than CDW Corp. However, Alvotech is 2.06 times more volatile than CDW Corp. It trades about 0.04 of its potential returns per unit of risk. CDW Corp is currently generating about 0.03 per unit of risk. If you would invest  833.00  in Alvotech on May 5, 2025 and sell it today you would earn a total of  46.00  from holding Alvotech or generate 5.52% return on investment over 90 days.

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

Alvotech  vs.  CDW Corp

Alvotech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CDW Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, CDW Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Alvotech and CDW Corp

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

The idea behind Alvotech and CDW Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.