Correlation Between Cingulate Warrants and Alvotech

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

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

Diversification Opportunities for Cingulate Warrants and Alvotech

-0.26

Correlation Coefficient

Cingulate Warrants  Alvotech

Very good diversification

The 3 months correlation between Cingulate and Alvotech is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Cingulate Warrants 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 Cingulate Warrants 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 Cingulate Warrants i.e., Cingulate Warrants and Alvotech go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Alvotech

Assuming the 90 days horizon Cingulate Warrants is expected to generate 34.78 times more return on investment than Alvotech. However, Cingulate Warrants is 34.78 times more volatile than Alvotech. It trades about 0.12 of its potential returns per unit of risk. Alvotech is currently generating about 0.04 per unit of risk. If you would invest  26.00  in Cingulate Warrants on September 4, 2024 and sell it today you would lose (21.15) from holding Cingulate Warrants or give up 81.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.75%
Values	Daily Returns

Cingulate Warrants  vs.  Alvotech

Cingulate Warrants

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Alvotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 2 (%) 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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cingulate Warrants and Alvotech

The main advantage of trading using opposite Cingulate Warrants and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cingulate Warrants 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 Cingulate Warrants 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.