Correlation Between Alcon AG and Hologic
Can any of the company-specific risk be diversified away by investing in both Alcon AG and Hologic 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 Hologic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and Hologic, you can compare the effects of market volatilities on Alcon AG and Hologic 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 Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Hologic.
Diversification Opportunities for Alcon AG and Hologic
Very weak diversification
The 3 months correlation between Alcon and Hologic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic 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 Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Alcon AG i.e., Alcon AG and Hologic go up and down completely randomly.
Pair Corralation between Alcon AG and Hologic
Considering the 90-day investment horizon Alcon AG is expected to generate 1.23 times more return on investment than Hologic. However, Alcon AG is 1.23 times more volatile than Hologic. It trades about 0.04 of its potential returns per unit of risk. Hologic is currently generating about 0.02 per unit of risk. If you would invest 6,743 in Alcon AG on August 28, 2024 and sell it today you would earn a total of 1,874 from holding Alcon AG or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcon AG vs. Hologic
Performance |
| Timeline |
| Alcon AG |
| Hologic |
Alcon AG and Hologic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and Hologic
The main advantage of trading using opposite Alcon AG and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.| Alcon AG vs. Heartbeam | Alcon AG vs. EUDA Health Holdings | Alcon AG vs. Nutex Health | Alcon AG vs. Healthcare Triangle |
| Hologic vs. Haemonetics | Hologic vs. ICU Medical | Hologic vs. Envista Holdings Corp | Hologic vs. The Cooper Companies, |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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