Correlation Between Alcon AG and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both Alcon AG and Teleflex Incorporated 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 Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcon AG and Teleflex Incorporated, you can compare the effects of market volatilities on Alcon AG and Teleflex Incorporated 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 Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Teleflex Incorporated.
Diversification Opportunities for Alcon AG and Teleflex Incorporated
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alcon and Teleflex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Alcon AG i.e., Alcon AG and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between Alcon AG and Teleflex Incorporated
Considering the 90-day investment horizon Alcon AG is expected to generate 0.57 times more return on investment than Teleflex Incorporated. However, Alcon AG is 1.74 times less risky than Teleflex Incorporated. It trades about -0.08 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.16 per unit of risk. If you would invest 9,912 in Alcon AG on October 31, 2024 and sell it today you would lose (774.00) from holding Alcon AG or give up 7.81% 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. Teleflex Incorporated
Performance |
| Timeline |
| Alcon AG |
| Teleflex Incorporated |
Alcon AG and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcon AG and Teleflex Incorporated
The main advantage of trading using opposite Alcon AG and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Teleflex Incorporated 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG vs. ICU Medical |
| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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