Correlation Between Lgerin Egill and Alvotech
Can any of the company-specific risk be diversified away by investing in both Lgerin Egill 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 Lgerin Egill and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between lgerin Egill Skallagrmsson and Alvotech, you can compare the effects of market volatilities on Lgerin Egill 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 Lgerin Egill with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgerin Egill and Alvotech.
Diversification Opportunities for Lgerin Egill and Alvotech
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lgerin and Alvotech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding lgerin Egill Skallagrmsson and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Lgerin Egill 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 lgerin Egill Skallagrmsson 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 Lgerin Egill i.e., Lgerin Egill and Alvotech go up and down completely randomly.
Pair Corralation between Lgerin Egill and Alvotech
Assuming the 90 days trading horizon lgerin Egill Skallagrmsson is expected to generate 0.63 times more return on investment than Alvotech. However, lgerin Egill Skallagrmsson is 1.59 times less risky than Alvotech. It trades about 0.14 of its potential returns per unit of risk. Alvotech is currently generating about -0.2 per unit of risk. If you would invest 1,730 in lgerin Egill Skallagrmsson on August 28, 2024 and sell it today you would earn a total of 60.00 from holding lgerin Egill Skallagrmsson or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
lgerin Egill Skallagrmsson vs. Alvotech
Performance |
| Timeline |
| lgerin Egill Skallag |
| Alvotech |
Lgerin Egill and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgerin Egill and Alvotech
The main advantage of trading using opposite Lgerin Egill and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgerin Egill 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 lgerin Egill Skallagrmsson 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.| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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