Correlation Between Alcon AG and ICU Medical
Can any of the company-specific risk be diversified away by investing in both Alcon AG and ICU Medical 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 ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and ICU Medical, you can compare the effects of market volatilities on Alcon AG and ICU Medical 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 ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and ICU Medical.
Diversification Opportunities for Alcon AG and ICU Medical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alcon and ICU is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical 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 ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Alcon AG i.e., Alcon AG and ICU Medical go up and down completely randomly.
Pair Corralation between Alcon AG and ICU Medical
Considering the 90-day investment horizon Alcon AG is expected to under-perform the ICU Medical. In addition to that, Alcon AG is 1.09 times more volatile than ICU Medical. It trades about -0.29 of its total potential returns per unit of risk. ICU Medical is currently generating about -0.16 per unit of volatility. If you would invest 17,770 in ICU Medical on August 24, 2024 and sell it today you would lose (886.00) from holding ICU Medical or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alcon AG vs. ICU Medical
Performance |
| Timeline |
| Alcon AG |
| ICU Medical |
Alcon AG and ICU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and ICU Medical
The main advantage of trading using opposite Alcon AG and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, ICU Medical 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 ICU Medical will offset losses from the drop in ICU Medical's long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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