Correlation Between Visa and Alcon AG
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Alcon AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Alcon AG, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Alcon AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Alcon AG.
Diversification Opportunities for Visa and Alcon AG
Pay attention - limited upside
The 3 months correlation between Visa and Alcon is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and Visa 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 Visa Class A 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 Visa i.e., Visa and Alcon AG go up and down completely randomly.
Pair Corralation between Visa and Alcon AG
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.9 times more return on investment than Alcon AG. However, Visa Class A is 1.11 times less risky than Alcon AG. It trades about 0.29 of its potential returns per unit of risk. Alcon AG is currently generating about -0.29 per unit of risk. If you would invest 28,322 in Visa Class A on August 24, 2024 and sell it today you would earn a total of 2,417 from holding Visa Class A or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Visa Class A vs. Alcon AG
Performance |
| Timeline |
| Visa Class A |
| Alcon AG |
Visa and Alcon AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Alcon AG
The main advantage of trading using opposite Visa and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |