Correlation Between Molecular Partners and Alvotech

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

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

Diversification Opportunities for Molecular Partners and Alvotech

0.11

Correlation Coefficient

Molecular Partners  Alvotech

Average diversification

The 3 months correlation between Molecular and Alvotech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Molecular Partners 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 Molecular Partners AG 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 Molecular Partners i.e., Molecular Partners and Alvotech go up and down completely randomly.

Pair Corralation between Molecular Partners and Alvotech

Given the investment horizon of 90 days Molecular Partners AG is expected to under-perform the Alvotech. But the stock apears to be less risky and, when comparing its historical volatility, Molecular Partners AG is 1.03 times less risky than Alvotech. The stock trades about -0.05 of its potential returns per unit of risk. The Alvotech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  797.00  in Alvotech on May 6, 2025 and sell it today you would earn a total of  82.00  from holding Alvotech or generate 10.29% return on investment over 90 days.

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

Molecular Partners AG  vs.  Alvotech

Molecular Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Molecular Partners AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Alvotech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alvotech are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Alvotech displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molecular Partners and Alvotech

The main advantage of trading using opposite Molecular Partners and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners 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 Molecular Partners AG 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.