Correlation Between Alvotech and Neogen
Can any of the company-specific risk be diversified away by investing in both Alvotech and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alvotech and Neogen, you can compare the effects of market volatilities on Alvotech and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alvotech and Neogen.
Diversification Opportunities for Alvotech and Neogen
Excellent diversification
The 3 months correlation between Alvotech and Neogen is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alvotech and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Alvotech i.e., Alvotech and Neogen go up and down completely randomly.
Pair Corralation between Alvotech and Neogen
Given the investment horizon of 90 days Alvotech is expected to under-perform the Neogen. But the stock apears to be less risky and, when comparing its historical volatility, Alvotech is 1.46 times less risky than Neogen. The stock trades about -0.2 of its potential returns per unit of risk. The Neogen is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Neogen on August 28, 2024 and sell it today you would earn a total of 126.00 from holding Neogen or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alvotech vs. Neogen
Performance |
| Timeline |
| Alvotech |
| Neogen |
Alvotech and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alvotech and Neogen
The main advantage of trading using opposite Alvotech and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alvotech position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Alvotech vs. Intracellular Th | Alvotech vs. Catalent | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics |
| Neogen vs. Heartbeam | Neogen vs. EUDA Health Holdings | Neogen vs. Nutex Health | Neogen vs. Healthcare Triangle |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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