Correlation Between Iovance Biotherapeutics and Alvotech

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Can any of the company-specific risk be diversified away by investing in both Iovance Biotherapeutics 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 Iovance Biotherapeutics and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iovance Biotherapeutics and Alvotech, you can compare the effects of market volatilities on Iovance Biotherapeutics 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 Iovance Biotherapeutics with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iovance Biotherapeutics and Alvotech.

Diversification Opportunities for Iovance Biotherapeutics and Alvotech

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Iovance and Alvotech is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Iovance Biotherapeutics 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 Iovance Biotherapeutics 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 Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Alvotech go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Alvotech

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the Alvotech. In addition to that, Iovance Biotherapeutics is 2.28 times more volatile than Alvotech. It trades about -0.16 of its total potential returns per unit of risk. Alvotech is currently generating about -0.01 per unit of volatility. If you would invest  1,193  in Alvotech on September 14, 2024 and sell it today you would lose (8.50) from holding Alvotech or give up 0.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Iovance Biotherapeutics  vs.  Alvotech

 Performance 
       Timeline  
Iovance Biotherapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Iovance Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Alvotech 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Iovance Biotherapeutics and Alvotech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Iovance Biotherapeutics and Alvotech

The main advantage of trading using opposite Iovance Biotherapeutics and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iovance Biotherapeutics 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.
The idea behind Iovance Biotherapeutics and Alvotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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