Correlation Between FS KKR and Alvotech
Can any of the company-specific risk be diversified away by investing in both FS KKR and Alvotech 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 FS KKR and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FS KKR Capital and Alvotech, you can compare the effects of market volatilities on FS KKR and Alvotech 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 FS KKR with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS KKR and Alvotech.
Diversification Opportunities for FS KKR and Alvotech
Good diversification
The 3 months correlation between FSK and Alvotech is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and FS KKR 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 FS KKR Capital are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of FS KKR i.e., FS KKR and Alvotech go up and down completely randomly.
Pair Corralation between FS KKR and Alvotech
Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.51 times more return on investment than Alvotech. However, FS KKR Capital is 1.98 times less risky than Alvotech. It trades about 0.22 of its potential returns per unit of risk. Alvotech is currently generating about 0.11 per unit of risk. If you would invest 2,086 in FS KKR Capital on October 20, 2024 and sell it today you would earn a total of 140.00 from holding FS KKR Capital or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FS KKR Capital vs. Alvotech
Performance |
| Timeline |
| FS KKR Capital |
| Alvotech |
FS KKR and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FS KKR and Alvotech
The main advantage of trading using opposite FS KKR and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR position performs unexpectedly, Alvotech 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 Alvotech will offset losses from the drop in Alvotech's long position.| FS KKR vs. BlackRock TCP Capital | FS KKR vs. Triplepoint Venture Growth | FS KKR vs. Sixth Street Specialty | FS KKR vs. Golub Capital BDC |
| Alvotech vs. Intracellular Th | Alvotech vs. Amphastar P | Alvotech vs. Assertio Therapeutics | Alvotech vs. ANI Pharmaceuticals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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