Correlation Between Iceland Seafood and Alvotech
Can any of the company-specific risk be diversified away by investing in both Iceland Seafood 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 Iceland Seafood and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iceland Seafood International and Alvotech, you can compare the effects of market volatilities on Iceland Seafood 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 Iceland Seafood with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iceland Seafood and Alvotech.
Diversification Opportunities for Iceland Seafood and Alvotech
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iceland and Alvotech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Iceland Seafood International and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Iceland Seafood 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 Iceland Seafood International 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 Iceland Seafood i.e., Iceland Seafood and Alvotech go up and down completely randomly.
Pair Corralation between Iceland Seafood and Alvotech
Assuming the 90 days trading horizon Iceland Seafood International is expected to generate 0.68 times more return on investment than Alvotech. However, Iceland Seafood International is 1.48 times less risky than Alvotech. It trades about -0.13 of its potential returns per unit of risk. Alvotech is currently generating about -0.16 per unit of risk. If you would invest 496.00 in Iceland Seafood International on August 25, 2024 and sell it today you would lose (18.00) from holding Iceland Seafood International or give up 3.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iceland Seafood International vs. Alvotech
Performance |
| Timeline |
| Iceland Seafood Inte |
| Alvotech |
Iceland Seafood and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iceland Seafood and Alvotech
The main advantage of trading using opposite Iceland Seafood and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iceland Seafood 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.| Iceland Seafood vs. Alvotech | Iceland Seafood vs. Festi hf | Iceland Seafood vs. slandsbanki hf | Iceland Seafood vs. Hagar 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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