Correlation Between Cirmaker Technology and Alvotech

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

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

Diversification Opportunities for Cirmaker Technology and Alvotech

0.32

Correlation Coefficient

Cirmaker Technology  Alvotech

Weak diversification

The 3 months correlation between Cirmaker and Alvotech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cirmaker Technology and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Cirmaker Technology 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 Cirmaker Technology 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 Cirmaker Technology i.e., Cirmaker Technology and Alvotech go up and down completely randomly.

Pair Corralation between Cirmaker Technology and Alvotech

Given the investment horizon of 90 days Cirmaker Technology is expected to generate 3.08 times more return on investment than Alvotech. However, Cirmaker Technology is 3.08 times more volatile than Alvotech. It trades about 0.23 of its potential returns per unit of risk. Alvotech is currently generating about 0.58 per unit of risk. If you would invest  4.50  in Cirmaker Technology on October 8, 2024 and sell it today you would earn a total of  0.90  from holding Cirmaker Technology or generate 20.0% return on investment over 90 days.

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

Cirmaker Technology  vs.  Alvotech

Cirmaker Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirmaker Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Cirmaker Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alvotech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 3 (%) 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.

Pair Trading with Cirmaker Technology and Alvotech

The main advantage of trading using opposite Cirmaker Technology and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cirmaker Technology 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 Cirmaker Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.