Correlation Between Hampidjan and Alvotech
Can any of the company-specific risk be diversified away by investing in both Hampidjan 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 Hampidjan and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hampidjan hf and Alvotech, you can compare the effects of market volatilities on Hampidjan 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 Hampidjan with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hampidjan and Alvotech.
Diversification Opportunities for Hampidjan and Alvotech
Significant diversification
The 3 months correlation between Hampidjan and Alvotech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hampidjan hf and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Hampidjan 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 Hampidjan hf 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 Hampidjan i.e., Hampidjan and Alvotech go up and down completely randomly.
Pair Corralation between Hampidjan and Alvotech
Assuming the 90 days trading horizon Hampidjan hf is expected to generate 0.74 times more return on investment than Alvotech. However, Hampidjan hf is 1.35 times less risky than Alvotech. It trades about -0.2 of its potential returns per unit of risk. Alvotech is currently generating about -0.2 per unit of risk. If you would invest 11,700 in Hampidjan hf on August 28, 2024 and sell it today you would lose (700.00) from holding Hampidjan hf or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hampidjan hf vs. Alvotech
Performance |
| Timeline |
| Hampidjan hf |
| Alvotech |
Hampidjan and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hampidjan and Alvotech
The main advantage of trading using opposite Hampidjan and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hampidjan 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.| Hampidjan vs. Arion banki hf | Hampidjan vs. Flying Nickel Mining | Hampidjan vs. Marel hf | Hampidjan vs. Kvika banki hf |
| Alvotech vs. Iceland Seafood International | Alvotech vs. Kvika banki hf | Alvotech vs. Arion banki hf | Alvotech vs. Icelandair Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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