Correlation Between Alvotech and Celsius Holdings

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

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

Diversification Opportunities for Alvotech and Celsius Holdings

0.16

Correlation Coefficient

Alvotech  Celsius Holdings

Average diversification

The 3 months correlation between Alvotech and Celsius is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings 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 Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Alvotech i.e., Alvotech and Celsius Holdings go up and down completely randomly.

Pair Corralation between Alvotech and Celsius Holdings

Given the investment horizon of 90 days Alvotech is expected to generate 0.78 times more return on investment than Celsius Holdings. However, Alvotech is 1.28 times less risky than Celsius Holdings. It trades about 0.02 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.01 per unit of risk. If you would invest  1,157  in Alvotech on October 11, 2024 and sell it today you would earn a total of  168.00  from holding Alvotech or generate 14.52% return on investment over 90 days.

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

Alvotech  vs.  Celsius Holdings

Alvotech

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Alvotech and Celsius Holdings

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

The idea behind Alvotech and Celsius Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.