Correlation Between Strategic Education and Alvotech

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

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

Diversification Opportunities for Strategic Education and Alvotech

-0.68

Correlation Coefficient

Strategic Education  Alvotech

Excellent diversification

The 3 months correlation between Strategic and Alvotech is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Strategic Education 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 Strategic Education 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 Strategic Education i.e., Strategic Education and Alvotech go up and down completely randomly.

Pair Corralation between Strategic Education and Alvotech

Given the investment horizon of 90 days Strategic Education is expected to generate 1.1 times more return on investment than Alvotech. However, Strategic Education is 1.1 times more volatile than Alvotech. It trades about 0.07 of its potential returns per unit of risk. Alvotech is currently generating about 0.07 per unit of risk. If you would invest  8,695  in Strategic Education on October 11, 2024 and sell it today you would earn a total of  609.00  from holding Strategic Education or generate 7.0% return on investment over 90 days.

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

Strategic Education  vs.  Alvotech

Strategic Education

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Education are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Strategic Education may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Alvotech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Strategic Education and Alvotech

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