Correlation Between Repligen and Alvotech

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

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

Diversification Opportunities for Repligen and Alvotech

0.27

Correlation Coefficient

Repligen  Alvotech

Modest diversification

The 3 months correlation between Repligen and Alvotech is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Repligen 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 Repligen 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 Repligen i.e., Repligen and Alvotech go up and down completely randomly.

Pair Corralation between Repligen and Alvotech

Given the investment horizon of 90 days Repligen is expected to generate 1.51 times more return on investment than Alvotech. However, Repligen is 1.51 times more volatile than Alvotech. It trades about -0.01 of its potential returns per unit of risk. Alvotech is currently generating about -0.06 per unit of risk. If you would invest  14,695  in Repligen on December 24, 2024 and sell it today you would lose (693.00) from holding Repligen or give up 4.72% of portfolio value over 90 days.

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

Repligen  vs.  Alvotech

Repligen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Repligen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Alvotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Repligen and Alvotech

The main advantage of trading using opposite Repligen and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen 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 Repligen 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.