Correlation Between Alvotech and Fidus Investment

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

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

Diversification Opportunities for Alvotech and Fidus Investment

-0.43

Correlation Coefficient

Alvotech  Fidus Investment

Very good diversification

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

Pair Corralation between Alvotech and Fidus Investment

Given the investment horizon of 90 days Alvotech is expected to generate 1.06 times less return on investment than Fidus Investment. In addition to that, Alvotech is 2.4 times more volatile than Fidus Investment Corp. It trades about 0.05 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.13 per unit of volatility. If you would invest  1,870  in Fidus Investment Corp on October 7, 2024 and sell it today you would earn a total of  249.00  from holding Fidus Investment Corp or generate 13.32% return on investment over 90 days.

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

Alvotech  vs.  Fidus Investment Corp

Alvotech

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 4 (%) 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.

Fidus Investment Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidus Investment Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fidus Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alvotech and Fidus Investment

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

The idea behind Alvotech and Fidus Investment 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.