Correlation Between BioLife Solutions and Alcon AG
Can any of the company-specific risk be diversified away by investing in both BioLife Solutions and Alcon AG 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 BioLife Solutions and Alcon AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioLife Solutions and Alcon AG, you can compare the effects of market volatilities on BioLife Solutions and Alcon AG 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 BioLife Solutions with a short position of Alcon AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLife Solutions and Alcon AG.
Diversification Opportunities for BioLife Solutions and Alcon AG
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BioLife and Alcon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BioLife Solutions and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and BioLife Solutions 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 BioLife Solutions are associated (or correlated) with Alcon AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcon AG has no effect on the direction of BioLife Solutions i.e., BioLife Solutions and Alcon AG go up and down completely randomly.
Pair Corralation between BioLife Solutions and Alcon AG
Given the investment horizon of 90 days BioLife Solutions is expected to generate 2.71 times more return on investment than Alcon AG. However, BioLife Solutions is 2.71 times more volatile than Alcon AG. It trades about 0.08 of its potential returns per unit of risk. Alcon AG is currently generating about -0.08 per unit of risk. If you would invest 2,414 in BioLife Solutions on October 31, 2024 and sell it today you would earn a total of 416.00 from holding BioLife Solutions or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioLife Solutions vs. Alcon AG
Performance |
| Timeline |
| BioLife Solutions |
| Alcon AG |
BioLife Solutions and Alcon AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioLife Solutions and Alcon AG
The main advantage of trading using opposite BioLife Solutions and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioLife Solutions position performs unexpectedly, Alcon AG 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 Alcon AG will offset losses from the drop in Alcon AG's long position.| BioLife Solutions vs. Akoya Biosciences | BioLife Solutions vs. AtriCure | BioLife Solutions vs. ICU Medical | BioLife Solutions vs. Haemonetics |
| Alcon AG vs. Teleflex Incorporated | Alcon AG vs. West Pharmaceutical Services | Alcon AG vs. ResMed Inc | Alcon AG 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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