Correlation Between Stoke Therapeutics and Alvotech
Can any of the company-specific risk be diversified away by investing in both Stoke Therapeutics 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 Stoke Therapeutics and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoke Therapeutics and Alvotech, you can compare the effects of market volatilities on Stoke Therapeutics 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 Stoke Therapeutics with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoke Therapeutics and Alvotech.
Diversification Opportunities for Stoke Therapeutics and Alvotech
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stoke and Alvotech is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stoke Therapeutics and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Stoke Therapeutics 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 Stoke Therapeutics 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 Stoke Therapeutics i.e., Stoke Therapeutics and Alvotech go up and down completely randomly.
Pair Corralation between Stoke Therapeutics and Alvotech
Given the investment horizon of 90 days Stoke Therapeutics is expected to generate 2.66 times more return on investment than Alvotech. However, Stoke Therapeutics is 2.66 times more volatile than Alvotech. It trades about 0.1 of its potential returns per unit of risk. Alvotech is currently generating about 0.05 per unit of risk. If you would invest 379.00 in Stoke Therapeutics on August 26, 2024 and sell it today you would earn a total of 764.00 from holding Stoke Therapeutics or generate 201.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoke Therapeutics vs. Alvotech
Performance |
| Timeline |
| Stoke Therapeutics |
| Alvotech |
Stoke Therapeutics and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoke Therapeutics and Alvotech
The main advantage of trading using opposite Stoke Therapeutics and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoke Therapeutics 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.| Stoke Therapeutics vs. Eliem Therapeutics | Stoke Therapeutics vs. HCW Biologics | Stoke Therapeutics vs. Scpharmaceuticals | Stoke Therapeutics vs. Milestone Pharmaceuticals |
| Alvotech vs. Eliem Therapeutics | Alvotech vs. HCW Biologics | Alvotech vs. Scpharmaceuticals | Alvotech vs. Milestone 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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