Correlation Between Alcon AG and Becton Dickinson
Can any of the company-specific risk be diversified away by investing in both Alcon AG and Becton Dickinson 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 Becton Dickinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and Becton Dickinson and, you can compare the effects of market volatilities on Alcon AG and Becton Dickinson 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 Becton Dickinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Becton Dickinson.
Diversification Opportunities for Alcon AG and Becton Dickinson
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcon and Becton is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Becton Dickinson and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson 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 Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson has no effect on the direction of Alcon AG i.e., Alcon AG and Becton Dickinson go up and down completely randomly.
Pair Corralation between Alcon AG and Becton Dickinson
Considering the 90-day investment horizon Alcon AG is expected to under-perform the Becton Dickinson. But the stock apears to be less risky and, when comparing its historical volatility, Alcon AG is 1.04 times less risky than Becton Dickinson. The stock trades about -0.16 of its potential returns per unit of risk. The Becton Dickinson and is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 23,938 in Becton Dickinson and on October 20, 2024 and sell it today you would lose (200.00) from holding Becton Dickinson and or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcon AG vs. Becton Dickinson and
Performance |
| Timeline |
| Alcon AG |
| Becton Dickinson |
Alcon AG and Becton Dickinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and Becton Dickinson
The main advantage of trading using opposite Alcon AG and Becton Dickinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Becton Dickinson 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 Becton Dickinson will offset losses from the drop in Becton Dickinson's long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| Becton Dickinson vs. Haemonetics | Becton Dickinson vs. The Cooper Companies, | Becton Dickinson vs. ICU Medical | Becton Dickinson vs. AngioDynamics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |