Correlation Between Alvotech and Lgerin Egill
Can any of the company-specific risk be diversified away by investing in both Alvotech and Lgerin Egill 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 Lgerin Egill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and lgerin Egill Skallagrmsson, you can compare the effects of market volatilities on Alvotech and Lgerin Egill 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 Lgerin Egill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Lgerin Egill.
Diversification Opportunities for Alvotech and Lgerin Egill
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alvotech and Lgerin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and lgerin Egill Skallagrmsson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on lgerin Egill Skallag 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 Lgerin Egill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of lgerin Egill Skallag has no effect on the direction of Alvotech i.e., Alvotech and Lgerin Egill go up and down completely randomly.
Pair Corralation between Alvotech and Lgerin Egill
Assuming the 90 days trading horizon Alvotech is expected to under-perform the Lgerin Egill. In addition to that, Alvotech is 1.66 times more volatile than lgerin Egill Skallagrmsson. It trades about -0.16 of its total potential returns per unit of risk. lgerin Egill Skallagrmsson is currently generating about 0.08 per unit of volatility. If you would invest 1,730 in lgerin Egill Skallagrmsson on August 25, 2024 and sell it today you would earn a total of 30.00 from holding lgerin Egill Skallagrmsson or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. lgerin Egill Skallagrmsson
Performance |
| Timeline |
| Alvotech |
| lgerin Egill Skallag |
Alvotech and Lgerin Egill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Lgerin Egill
The main advantage of trading using opposite Alvotech and Lgerin Egill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Lgerin Egill 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 Lgerin Egill will offset losses from the drop in Lgerin Egill's long position.The idea behind Alvotech and lgerin Egill Skallagrmsson 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.| Lgerin Egill vs. Arion banki hf | Lgerin Egill vs. Iceland Seafood International | Lgerin Egill 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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