Correlation Between Serstech and Alvotech SDB

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

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

Diversification Opportunities for Serstech and Alvotech SDB

0.22

Correlation Coefficient

Serstech  Alvotech SDB

Modest diversification

The 3 months correlation between Serstech and Alvotech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Serstech AB and Alvotech SDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech SDB and Serstech 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 Serstech AB are associated (or correlated) with Alvotech SDB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech SDB has no effect on the direction of Serstech i.e., Serstech and Alvotech SDB go up and down completely randomly.

Pair Corralation between Serstech and Alvotech SDB

Assuming the 90 days trading horizon Serstech AB is expected to under-perform the Alvotech SDB. But the stock apears to be less risky and, when comparing its historical volatility, Serstech AB is 1.04 times less risky than Alvotech SDB. The stock trades about -0.14 of its potential returns per unit of risk. The Alvotech SDB is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  9,830  in Alvotech SDB on May 4, 2025 and sell it today you would lose (1,230) from holding Alvotech SDB or give up 12.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.13%
Values	Daily Returns

Serstech AB  vs.  Alvotech SDB

Serstech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serstech AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alvotech SDB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvotech SDB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Serstech and Alvotech SDB

The main advantage of trading using opposite Serstech and Alvotech SDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serstech position performs unexpectedly, Alvotech SDB 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 SDB will offset losses from the drop in Alvotech SDB's long position.

The idea behind Serstech AB and Alvotech SDB 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.