Correlation Between SMX Public and Alvotech

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

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

Diversification Opportunities for SMX Public and Alvotech

0.61

Correlation Coefficient

SMX Public  Alvotech

Poor diversification

The 3 months correlation between SMX and Alvotech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and SMX Public 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 SMX Public Limited 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 SMX Public i.e., SMX Public and Alvotech go up and down completely randomly.

Pair Corralation between SMX Public and Alvotech

Assuming the 90 days horizon SMX Public Limited is expected to generate 26.25 times more return on investment than Alvotech. However, SMX Public is 26.25 times more volatile than Alvotech. It trades about 0.22 of its potential returns per unit of risk. Alvotech is currently generating about 0.02 per unit of risk. If you would invest  0.75  in SMX Public Limited on October 27, 2024 and sell it today you would earn a total of  2.18  from holding SMX Public Limited or generate 290.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.33%
Values	Daily Returns

SMX Public Limited  vs.  Alvotech

SMX Public Limited

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SMX Public Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SMX Public showed solid returns over the last few months and may actually be approaching a breakup point.

Alvotech

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 1 (%) 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 SMX Public and Alvotech

The main advantage of trading using opposite SMX Public and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public 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 SMX Public Limited 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.