Correlation Between Alvotech and ICU Medical
Can any of the company-specific risk be diversified away by investing in both Alvotech and ICU Medical 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 ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and ICU Medical, you can compare the effects of market volatilities on Alvotech and ICU Medical 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 ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and ICU Medical.
Diversification Opportunities for Alvotech and ICU Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alvotech and ICU is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical 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 ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Alvotech i.e., Alvotech and ICU Medical go up and down completely randomly.
Pair Corralation between Alvotech and ICU Medical
Given the investment horizon of 90 days Alvotech is expected to under-perform the ICU Medical. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 1.23 times less risky than ICU Medical. The stock trades about -0.07 of its potential returns per unit of risk. The ICU Medical is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,250 in ICU Medical on September 1, 2024 and sell it today you would earn a total of 6,146 from holding ICU Medical or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. ICU Medical
Performance |
| Timeline |
| Alvotech |
| ICU Medical |
Alvotech and ICU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and ICU Medical
The main advantage of trading using opposite Alvotech and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, ICU Medical 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 ICU Medical will offset losses from the drop in ICU Medical's long position.| Alvotech vs. Tff Pharmaceuticals | Alvotech vs. Eliem Therapeutics | Alvotech vs. Inhibrx | Alvotech vs. Enliven Therapeutics |
| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |