Correlation Between Alvotech and Moderna
Can any of the company-specific risk be diversified away by investing in both Alvotech and Moderna 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 Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Moderna, you can compare the effects of market volatilities on Alvotech and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Moderna.
Diversification Opportunities for Alvotech and Moderna
Excellent diversification
The 3 months correlation between Alvotech and Moderna is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Alvotech i.e., Alvotech and Moderna go up and down completely randomly.
Pair Corralation between Alvotech and Moderna
Given the investment horizon of 90 days Alvotech is expected to generate 0.86 times more return on investment than Moderna. However, Alvotech is 1.16 times less risky than Moderna. It trades about 0.01 of its potential returns per unit of risk. Moderna is currently generating about -0.07 per unit of risk. If you would invest 1,278 in Alvotech on August 27, 2024 and sell it today you would lose (79.00) from holding Alvotech or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Moderna
Performance |
| Timeline |
| Alvotech |
| Moderna |
Alvotech and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Moderna
The main advantage of trading using opposite Alvotech and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.| Alvotech vs. Intracellular Th | Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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