Correlation Between Alvotech and Slandsbanki

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

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

Diversification Opportunities for Alvotech and Slandsbanki

0.78

Correlation Coefficient

Alvotech  Slandsbanki

Poor diversification

The 3 months correlation between Alvotech and Slandsbanki is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and slandsbanki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on slandsbanki hf 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 Slandsbanki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of slandsbanki hf has no effect on the direction of Alvotech i.e., Alvotech and Slandsbanki go up and down completely randomly.

Pair Corralation between Alvotech and Slandsbanki

Assuming the 90 days trading horizon Alvotech is expected to generate 10.96 times less return on investment than Slandsbanki. In addition to that, Alvotech is 1.2 times more volatile than slandsbanki hf. It trades about 0.02 of its total potential returns per unit of risk. slandsbanki hf is currently generating about 0.26 per unit of volatility. If you would invest  9,960  in slandsbanki hf on September 5, 2024 and sell it today you would earn a total of  2,540  from holding slandsbanki hf or generate 25.5% return on investment over 90 days.

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

Alvotech  vs.  slandsbanki hf

Alvotech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Alvotech is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

slandsbanki hf

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in slandsbanki hf are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Slandsbanki exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alvotech and Slandsbanki

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

The idea behind Alvotech and slandsbanki hf 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.