Correlation Between Celsius Holdings and Alvotech

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

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

Diversification Opportunities for Celsius Holdings and Alvotech

0.16

Correlation Coefficient

Celsius Holdings  Alvotech

Average diversification

The 3 months correlation between Celsius and Alvotech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Celsius Holdings 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 Celsius Holdings are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and Alvotech go up and down completely randomly.

Pair Corralation between Celsius Holdings and Alvotech

Given the investment horizon of 90 days Celsius Holdings is expected to generate 1.83 times less return on investment than Alvotech. In addition to that, Celsius Holdings is 1.28 times more volatile than Alvotech. It trades about 0.01 of its total potential returns per unit of risk. Alvotech is currently generating about 0.02 per unit of volatility. If you would invest  1,157  in Alvotech on October 11, 2024 and sell it today you would earn a total of  168.00  from holding Alvotech or generate 14.52% return on investment over 90 days.

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

Celsius Holdings  vs.  Alvotech

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Celsius Holdings and Alvotech

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

The idea behind Celsius Holdings and Alvotech 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.