Correlation Between Alcon AG and Ontrak
Can any of the company-specific risk be diversified away by investing in both Alcon AG and Ontrak 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 Ontrak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and Ontrak Inc, you can compare the effects of market volatilities on Alcon AG and Ontrak 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 Ontrak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Ontrak.
Diversification Opportunities for Alcon AG and Ontrak
Poor diversification
The 3 months correlation between Alcon and Ontrak is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Ontrak Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontrak Inc 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 Ontrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontrak Inc has no effect on the direction of Alcon AG i.e., Alcon AG and Ontrak go up and down completely randomly.
Pair Corralation between Alcon AG and Ontrak
Considering the 90-day investment horizon Alcon AG is expected to generate 0.17 times more return on investment than Ontrak. However, Alcon AG is 5.92 times less risky than Ontrak. It trades about -0.01 of its potential returns per unit of risk. Ontrak Inc is currently generating about -0.06 per unit of risk. If you would invest 9,041 in Alcon AG on September 2, 2024 and sell it today you would lose (156.00) from holding Alcon AG or give up 1.73% 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. Ontrak Inc
Performance |
| Timeline |
| Alcon AG |
| Ontrak Inc |
Alcon AG and Ontrak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and Ontrak
The main advantage of trading using opposite Alcon AG and Ontrak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Ontrak 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 Ontrak will offset losses from the drop in Ontrak's long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| Ontrak vs. American Well Corp | Ontrak vs. Root Inc | Ontrak vs. Goodrx Holdings | Ontrak vs. Bigcommerce Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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