Correlation Between Alcon AG and Coloplast
Can any of the company-specific risk be diversified away by investing in both Alcon AG and Coloplast 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 Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and Coloplast AS, you can compare the effects of market volatilities on Alcon AG and Coloplast 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 Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Coloplast.
Diversification Opportunities for Alcon AG and Coloplast
Very weak diversification
The 3 months correlation between Alcon and Coloplast is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast AS 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 Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast AS has no effect on the direction of Alcon AG i.e., Alcon AG and Coloplast go up and down completely randomly.
Pair Corralation between Alcon AG and Coloplast
Considering the 90-day investment horizon Alcon AG is expected to generate 0.58 times more return on investment than Coloplast. However, Alcon AG is 1.72 times less risky than Coloplast. It trades about 0.03 of its potential returns per unit of risk. Coloplast AS is currently generating about 0.0 per unit of risk. If you would invest 7,376 in Alcon AG on October 21, 2024 and sell it today you would earn a total of 1,061 from holding Alcon AG or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.81% |
| Values | Daily Returns |
Alcon AG vs. Coloplast AS
Performance |
| Timeline |
| Alcon AG |
| Coloplast AS |
Alcon AG and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and Coloplast
The main advantage of trading using opposite Alcon AG and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| Coloplast vs. Sysmex Corp | Coloplast vs. Straumann Holding AG | Coloplast vs. Essilor International SA | Coloplast vs. EssilorLuxottica Socit anonyme |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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