Correlation Between GlucoTrack and Alcon AG
Can any of the company-specific risk be diversified away by investing in both GlucoTrack 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 GlucoTrack and Alcon AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlucoTrack and Alcon AG, you can compare the effects of market volatilities on GlucoTrack 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 GlucoTrack with a short position of Alcon AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlucoTrack and Alcon AG.
Diversification Opportunities for GlucoTrack and Alcon AG
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GlucoTrack and Alcon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GlucoTrack and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and GlucoTrack 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 GlucoTrack 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 GlucoTrack i.e., GlucoTrack and Alcon AG go up and down completely randomly.
Pair Corralation between GlucoTrack and Alcon AG
Given the investment horizon of 90 days GlucoTrack is expected to generate 11.17 times more return on investment than Alcon AG. However, GlucoTrack is 11.17 times more volatile than Alcon AG. It trades about 0.01 of its potential returns per unit of risk. Alcon AG is currently generating about 0.04 per unit of risk. If you would invest 810.00 in GlucoTrack on September 3, 2024 and sell it today you would lose (786.00) from holding GlucoTrack or give up 97.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlucoTrack vs. Alcon AG
Performance |
| Timeline |
| GlucoTrack |
| Alcon AG |
GlucoTrack and Alcon AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlucoTrack and Alcon AG
The main advantage of trading using opposite GlucoTrack and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlucoTrack 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.The idea behind GlucoTrack and Alcon AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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