Correlation Between Sn Hf and Alvotech

Can any of the company-specific risk be diversified away by investing in both Sn Hf 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 Sn Hf and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sn hf and Alvotech, you can compare the effects of market volatilities on Sn Hf 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 Sn Hf with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sn Hf and Alvotech.

Diversification Opportunities for Sn Hf and Alvotech

0.48

Correlation Coefficient

Sn Hf  Alvotech

Very weak diversification

The 3 months correlation between SYN and Alvotech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sn hf and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Sn Hf 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 Sn hf 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 Sn Hf i.e., Sn Hf and Alvotech go up and down completely randomly.

Pair Corralation between Sn Hf and Alvotech

Assuming the 90 days trading horizon Sn hf is expected to generate 1.73 times more return on investment than Alvotech. However, Sn Hf is 1.73 times more volatile than Alvotech. It trades about -0.12 of its potential returns per unit of risk. Alvotech is currently generating about -0.24 per unit of risk. If you would invest  3,340  in Sn hf on June 29, 2024 and sell it today you would lose (180.00) from holding Sn hf or give up 5.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sn hf  vs.  Alvotech

Sn hf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sn hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sn Hf is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Alvotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Sn Hf and Alvotech

The main advantage of trading using opposite Sn Hf and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sn Hf 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 Sn hf 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.