Correlation Between Alvotech and Arion Banki
Can any of the company-specific risk be diversified away by investing in both Alvotech and Arion Banki 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 Alvotech and Arion Banki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Arion banki hf, you can compare the effects of market volatilities on Alvotech and Arion Banki 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 Alvotech with a short position of Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Arion Banki.
Diversification Opportunities for Alvotech and Arion Banki
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alvotech and Arion is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf and Alvotech 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 Alvotech are associated (or correlated) with Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of Alvotech i.e., Alvotech and Arion Banki go up and down completely randomly.
Pair Corralation between Alvotech and Arion Banki
Assuming the 90 days trading horizon Alvotech is expected to under-perform the Arion Banki. In addition to that, Alvotech is 1.52 times more volatile than Arion banki hf. It trades about -0.2 of its total potential returns per unit of risk. Arion banki hf is currently generating about 0.05 per unit of volatility. If you would invest 15,450 in Arion banki hf on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Arion banki hf or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Arion banki hf
Performance |
| Timeline |
| Alvotech |
| Arion banki hf |
Alvotech and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Arion Banki
The main advantage of trading using opposite Alvotech and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Arion Banki 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 Arion Banki will offset losses from the drop in Arion Banki's long position.| Alvotech vs. Iceland Seafood International | Alvotech vs. Kvika banki hf | Alvotech vs. Arion banki hf | Alvotech vs. Icelandair Group hf |
| Arion Banki vs. slandsbanki hf | Arion Banki vs. Kvika banki hf | Arion Banki vs. Alvotech | Arion Banki vs. Iceland Seafood International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |