Correlation Between Alvotech and IAGLN

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

By analyzing existing cross correlation between Alvotech and IAGLN 425 15 NOV 32, you can compare the effects of market volatilities on Alvotech and IAGLN 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 IAGLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and IAGLN.

Diversification Opportunities for Alvotech and IAGLN

-0.23

Correlation Coefficient

Alvotech  IAGLN

Very good diversification

The 3 months correlation between Alvotech and IAGLN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and IAGLN 425 15 NOV 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAGLN 425 15 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 IAGLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAGLN 425 15 has no effect on the direction of Alvotech i.e., Alvotech and IAGLN go up and down completely randomly.

Pair Corralation between Alvotech and IAGLN

Given the investment horizon of 90 days Alvotech is expected to generate 0.77 times more return on investment than IAGLN. However, Alvotech is 1.29 times less risky than IAGLN. It trades about 0.02 of its potential returns per unit of risk. IAGLN 425 15 NOV 32 is currently generating about -0.07 per unit of risk. If you would invest  1,299  in Alvotech on October 27, 2024 and sell it today you would earn a total of  13.00  from holding Alvotech or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

Alvotech  vs.  IAGLN 425 15 NOV 32

Alvotech

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 1 (%) 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.

IAGLN 425 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAGLN 425 15 NOV 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for IAGLN 425 15 NOV 32 investors.

Pair Trading with Alvotech and IAGLN

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

The idea behind Alvotech and IAGLN 425 15 NOV 32 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.