Correlation Between Alvotech and Kvika Banki
Can any of the company-specific risk be diversified away by investing in both Alvotech and Kvika 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 Kvika Banki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Kvika banki hf, you can compare the effects of market volatilities on Alvotech and Kvika 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 Kvika Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Kvika Banki.
Diversification Opportunities for Alvotech and Kvika Banki
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alvotech and Kvika is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Kvika banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvika 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 Kvika Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvika banki hf has no effect on the direction of Alvotech i.e., Alvotech and Kvika Banki go up and down completely randomly.
Pair Corralation between Alvotech and Kvika Banki
Assuming the 90 days trading horizon Alvotech is expected to under-perform the Kvika Banki. In addition to that, Alvotech is 2.05 times more volatile than Kvika banki hf. It trades about -0.12 of its total potential returns per unit of risk. Kvika banki hf is currently generating about -0.1 per unit of volatility. If you would invest 1,900 in Kvika banki hf on August 24, 2024 and sell it today you would lose (40.00) from holding Kvika banki hf or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Kvika banki hf
Performance |
| Timeline |
| Alvotech |
| Kvika banki hf |
Alvotech and Kvika Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Kvika Banki
The main advantage of trading using opposite Alvotech and Kvika Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Kvika 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 Kvika Banki will offset losses from the drop in Kvika Banki's long position.The idea behind Alvotech and Kvika banki 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.| Kvika Banki vs. Alvotech | Kvika Banki vs. Festi hf | Kvika Banki vs. slandsbanki hf | Kvika Banki vs. Hagar 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.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |