Correlation Between Keurig Dr and Alvotech

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Can any of the company-specific risk be diversified away by investing in both Keurig Dr 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 Keurig Dr and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keurig Dr Pepper and Alvotech, you can compare the effects of market volatilities on Keurig Dr 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 Keurig Dr with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Alvotech.

Diversification Opportunities for Keurig Dr and Alvotech

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Keurig and Alvotech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Keurig Dr 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 Keurig Dr Pepper 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 Keurig Dr i.e., Keurig Dr and Alvotech go up and down completely randomly.

Pair Corralation between Keurig Dr and Alvotech

Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Alvotech. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 1.27 times less risky than Alvotech. The stock trades about -0.18 of its potential returns per unit of risk. The Alvotech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,298  in Alvotech on October 9, 2024 and sell it today you would earn a total of  32.00  from holding Alvotech or generate 2.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Keurig Dr Pepper  vs.  Alvotech

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50510
JavaScript chart by amCharts 3.21.15KDP ALVO
       Timeline  
Keurig Dr Pepper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan31323334353637
Alvotech 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
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 current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9.51010.51111.51212.51313.5

Keurig Dr and Alvotech Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.2-1.7-1.2-0.7-0.20.240.741.241.74 0.100.150.200.25
JavaScript chart by amCharts 3.21.15KDP ALVO
       Returns  

Pair Trading with Keurig Dr and Alvotech

The main advantage of trading using opposite Keurig Dr and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr 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 Keurig Dr Pepper 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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