Correlation Between Alcon AG and Femasys

Can any of the company-specific risk be diversified away by investing in both Alcon AG and Femasys 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 Femasys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alcon AG and Femasys, you can compare the effects of market volatilities on Alcon AG and Femasys 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 Femasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcon AG and Femasys.

Diversification Opportunities for Alcon AG and Femasys

0.43

Correlation Coefficient

Alcon AG  Femasys

Very weak diversification

The 3 months correlation between Alcon and Femasys is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys 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 Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of Alcon AG i.e., Alcon AG and Femasys go up and down completely randomly.

Pair Corralation between Alcon AG and Femasys

Considering the 90-day investment horizon Alcon AG is expected to generate 71.12 times less return on investment than Femasys. But when comparing it to its historical volatility, Alcon AG is 14.51 times less risky than Femasys. It trades about 0.01 of its potential returns per unit of risk. Femasys is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Femasys on October 4, 2024 and sell it today you would earn a total of  70.00  from holding Femasys or generate 175.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alcon AG  vs.  Femasys

Alcon AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alcon AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Femasys

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Femasys is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alcon AG and Femasys

The main advantage of trading using opposite Alcon AG and Femasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcon AG position performs unexpectedly, Femasys 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 Femasys will offset losses from the drop in Femasys' long position.

The idea behind Alcon AG and Femasys 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.