Correlation Between Alvotech and CMDKF

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

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

Diversification Opportunities for Alvotech and CMDKF

0.0

Correlation Coefficient

Alvotech  CMDKF

Pay attention - limited upside

The 3 months correlation between Alvotech and CMDKF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and CMDKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMDKF 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 CMDKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMDKF has no effect on the direction of Alvotech i.e., Alvotech and CMDKF go up and down completely randomly.

Pair Corralation between Alvotech and CMDKF

If you would invest  1,290  in Alvotech on October 23, 2024 and sell it today you would earn a total of  37.00  from holding Alvotech or generate 2.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Alvotech  vs.  CMDKF

Alvotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Alvotech is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CMDKF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CMDKF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, CMDKF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alvotech and CMDKF

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

The idea behind Alvotech and CMDKF 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.