Correlation Between Electrocore LLC and Alcon AG
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC 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 Electrocore LLC and Alcon AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Alcon AG, you can compare the effects of market volatilities on Electrocore LLC 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 Electrocore LLC with a short position of Alcon AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Alcon AG.
Diversification Opportunities for Electrocore LLC and Alcon AG
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electrocore and Alcon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and Electrocore LLC 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 Electrocore LLC 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 Electrocore LLC i.e., Electrocore LLC and Alcon AG go up and down completely randomly.
Pair Corralation between Electrocore LLC and Alcon AG
Given the investment horizon of 90 days Electrocore LLC is expected to generate 6.56 times more return on investment than Alcon AG. However, Electrocore LLC is 6.56 times more volatile than Alcon AG. It trades about 0.25 of its potential returns per unit of risk. Alcon AG is currently generating about -0.05 per unit of risk. If you would invest 965.00 in Electrocore LLC on October 19, 2024 and sell it today you would earn a total of 625.00 from holding Electrocore LLC or generate 64.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Alcon AG
Performance |
| Timeline |
| Electrocore LLC |
| Alcon AG |
Electrocore LLC and Alcon AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Alcon AG
The main advantage of trading using opposite Electrocore LLC and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC 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.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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