Correlation Between Alvotech and Repligen

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

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

Diversification Opportunities for Alvotech and Repligen

-0.37

Correlation Coefficient

Alvotech  Repligen

Very good diversification

The 3 months correlation between Alvotech and Repligen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen 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 Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Alvotech i.e., Alvotech and Repligen go up and down completely randomly.

Pair Corralation between Alvotech and Repligen

Given the investment horizon of 90 days Alvotech is expected to generate 1.65 times less return on investment than Repligen. But when comparing it to its historical volatility, Alvotech is 1.94 times less risky than Repligen. It trades about 0.07 of its potential returns per unit of risk. Repligen is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  13,999  in Repligen on September 13, 2024 and sell it today you would earn a total of  1,195  from holding Repligen or generate 8.54% return on investment over 90 days.

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

Alvotech  vs.  Repligen

Alvotech

Risk-Adjusted Performance

5 of 100

Modest

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 inconsistent basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Repligen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alvotech and Repligen

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

The idea behind Alvotech and Repligen 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.