Correlation Between CATERPILLAR and Alvotech
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By analyzing existing cross correlation between CATERPILLAR INC 53 and Alvotech, you can compare the effects of market volatilities on CATERPILLAR 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 CATERPILLAR with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATERPILLAR and Alvotech.
Diversification Opportunities for CATERPILLAR and Alvotech
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATERPILLAR and Alvotech is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CATERPILLAR INC 53 and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and CATERPILLAR 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 CATERPILLAR INC 53 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 CATERPILLAR i.e., CATERPILLAR and Alvotech go up and down completely randomly.
Pair Corralation between CATERPILLAR and Alvotech
Assuming the 90 days trading horizon CATERPILLAR INC 53 is expected to generate 0.4 times more return on investment than Alvotech. However, CATERPILLAR INC 53 is 2.49 times less risky than Alvotech. It trades about 0.08 of its potential returns per unit of risk. Alvotech is currently generating about -0.27 per unit of risk. If you would invest 10,401 in CATERPILLAR INC 53 on September 5, 2024 and sell it today you would earn a total of 110.00 from holding CATERPILLAR INC 53 or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
CATERPILLAR INC 53 vs. Alvotech
Performance |
| Timeline |
| CATERPILLAR INC 53 |
| Alvotech |
CATERPILLAR and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATERPILLAR and Alvotech
The main advantage of trading using opposite CATERPILLAR and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATERPILLAR 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.| CATERPILLAR vs. Alvotech | CATERPILLAR vs. Newell Brands | CATERPILLAR vs. Amgen Inc | CATERPILLAR vs. SunLink Health Systems |
| Alvotech vs. Candel Therapeutics | Alvotech vs. Cingulate Warrants | Alvotech vs. Unicycive Therapeutics | Alvotech vs. Cardio Diagnostics Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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