Correlation Between Alvotech and Celestica

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

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

Diversification Opportunities for Alvotech and Celestica

0.43

Correlation Coefficient

Alvotech  Celestica

Very weak diversification

The 3 months correlation between Alvotech and Celestica is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Alvotech i.e., Alvotech and Celestica go up and down completely randomly.

Pair Corralation between Alvotech and Celestica

Given the investment horizon of 90 days Alvotech is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 3.01 times less risky than Celestica. The stock trades about -0.05 of its potential returns per unit of risk. The Celestica is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9,752  in Celestica on December 23, 2024 and sell it today you would lose (157.00) from holding Celestica or give up 1.61% of portfolio value over 90 days.

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

Alvotech  vs.  Celestica

Alvotech

Risk-Adjusted Performance

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.

Celestica

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Celestica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alvotech and Celestica

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

The idea behind Alvotech and Celestica 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.