Correlation Between Alvotech and CONSOLIDATED

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

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

Diversification Opportunities for Alvotech and CONSOLIDATED

-0.02

Correlation Coefficient

Alvotech  CONSOLIDATED

Good diversification

The 3 months correlation between Alvotech and CONSOLIDATED is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Alvotech i.e., Alvotech and CONSOLIDATED go up and down completely randomly.

Pair Corralation between Alvotech and CONSOLIDATED

Given the investment horizon of 90 days Alvotech is expected to generate 31.03 times less return on investment than CONSOLIDATED. But when comparing it to its historical volatility, Alvotech is 17.25 times less risky than CONSOLIDATED. It trades about 0.02 of its potential returns per unit of risk. CONSOLIDATED EDISON N is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,186  in CONSOLIDATED EDISON N on October 11, 2024 and sell it today you would lose (869.00) from holding CONSOLIDATED EDISON N or give up 9.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.05%
Values	Daily Returns

Alvotech  vs.  CONSOLIDATED EDISON N

Alvotech

Risk-Adjusted Performance

5 of 100

Weak

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

CONSOLIDATED EDISON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSOLIDATED EDISON N 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 CONSOLIDATED EDISON N investors.

Pair Trading with Alvotech and CONSOLIDATED

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

The idea behind Alvotech and CONSOLIDATED EDISON N 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.