Correlation Between Alvotech and Hampidjan
Can any of the company-specific risk be diversified away by investing in both Alvotech and Hampidjan 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 Hampidjan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Hampidjan hf, you can compare the effects of market volatilities on Alvotech and Hampidjan 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 Hampidjan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Hampidjan.
Diversification Opportunities for Alvotech and Hampidjan
Significant diversification
The 3 months correlation between Alvotech and Hampidjan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Hampidjan hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampidjan 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 Hampidjan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampidjan hf has no effect on the direction of Alvotech i.e., Alvotech and Hampidjan go up and down completely randomly.
Pair Corralation between Alvotech and Hampidjan
Assuming the 90 days trading horizon Alvotech is expected to under-perform the Hampidjan. In addition to that, Alvotech is 1.08 times more volatile than Hampidjan hf. It trades about -0.16 of its total potential returns per unit of risk. Hampidjan hf is currently generating about -0.04 per unit of volatility. If you would invest 11,100 in Hampidjan hf on August 25, 2024 and sell it today you would lose (200.00) from holding Hampidjan hf or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Hampidjan hf
Performance |
| Timeline |
| Alvotech |
| Hampidjan hf |
Alvotech and Hampidjan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Hampidjan
The main advantage of trading using opposite Alvotech and Hampidjan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Hampidjan 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 Hampidjan will offset losses from the drop in Hampidjan's long position.The idea behind Alvotech and Hampidjan hf 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.| Hampidjan vs. Arion banki hf | Hampidjan vs. Flying Nickel Mining | Hampidjan vs. Marel hf | Hampidjan vs. Kvika banki hf |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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