Correlation Between AngioDynamics and Alcon AG

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

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

Diversification Opportunities for AngioDynamics and Alcon AG

0.2

Correlation Coefficient

AngioDynamics  Alcon AG

Modest diversification

The 3 months correlation between AngioDynamics and Alcon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AngioDynamics and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and AngioDynamics 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 AngioDynamics 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 AngioDynamics i.e., AngioDynamics and Alcon AG go up and down completely randomly.

Pair Corralation between AngioDynamics and Alcon AG

Given the investment horizon of 90 days AngioDynamics is expected to generate 4.89 times more return on investment than Alcon AG. However, AngioDynamics is 4.89 times more volatile than Alcon AG. It trades about 0.1 of its potential returns per unit of risk. Alcon AG is currently generating about 0.07 per unit of risk. If you would invest  714.00  in AngioDynamics on December 1, 2024 and sell it today you would earn a total of  215.00  from holding AngioDynamics or generate 30.11% return on investment over 90 days.

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

AngioDynamics  vs.  Alcon AG

AngioDynamics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AngioDynamics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, AngioDynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Alcon AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alcon AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Alcon AG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AngioDynamics and Alcon AG

The main advantage of trading using opposite AngioDynamics and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngioDynamics 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 AngioDynamics 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.