Correlation Between Alcon AG and AngioDynamics
Can any of the company-specific risk be diversified away by investing in both Alcon AG and AngioDynamics 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 Alcon AG and AngioDynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and AngioDynamics, you can compare the effects of market volatilities on Alcon AG and AngioDynamics 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 Alcon AG with a short position of AngioDynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and AngioDynamics.
Diversification Opportunities for Alcon AG and AngioDynamics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alcon and AngioDynamics is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and Alcon AG 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 Alcon AG are associated (or correlated) with AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of Alcon AG i.e., Alcon AG and AngioDynamics go up and down completely randomly.
Pair Corralation between Alcon AG and AngioDynamics
Considering the 90-day investment horizon Alcon AG is expected to under-perform the AngioDynamics. But the stock apears to be less risky and, when comparing its historical volatility, Alcon AG is 1.86 times less risky than AngioDynamics. The stock trades about -0.29 of its potential returns per unit of risk. The AngioDynamics is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 714.00 in AngioDynamics on August 24, 2024 and sell it today you would lose (40.00) from holding AngioDynamics or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alcon AG vs. AngioDynamics
Performance |
| Timeline |
| Alcon AG |
| AngioDynamics |
Alcon AG and AngioDynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and AngioDynamics
The main advantage of trading using opposite Alcon AG and AngioDynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, AngioDynamics 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 AngioDynamics will offset losses from the drop in AngioDynamics' long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| AngioDynamics vs. AptarGroup | AngioDynamics vs. Repro Med Systems | AngioDynamics vs. AtriCure | AngioDynamics vs. Akoya Biosciences |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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