Correlation Between Minerals Technologies and Alvotech

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

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

Diversification Opportunities for Minerals Technologies and Alvotech

-0.25

Correlation Coefficient

Minerals Technologies  Alvotech

Very good diversification

The 3 months correlation between Minerals and Alvotech is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies i.e., Minerals Technologies and Alvotech go up and down completely randomly.

Pair Corralation between Minerals Technologies and Alvotech

Considering the 90-day investment horizon Minerals Technologies is expected to generate 7.9 times less return on investment than Alvotech. In addition to that, Minerals Technologies is 1.04 times more volatile than Alvotech. It trades about 0.01 of its total potential returns per unit of risk. Alvotech is currently generating about 0.1 per unit of volatility. If you would invest  1,135  in Alvotech on September 26, 2024 and sell it today you would earn a total of  121.00  from holding Alvotech or generate 10.66% return on investment over 90 days.

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

Minerals Technologies  vs.  Alvotech

Minerals Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerals Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Minerals Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Alvotech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alvotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Minerals Technologies and Alvotech

The main advantage of trading using opposite Minerals Technologies and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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 Minerals Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.