Correlation Between Haemonetics and Alcon AG

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

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

Diversification Opportunities for Haemonetics and Alcon AG

-0.75

Correlation Coefficient

Haemonetics  Alcon AG

Pay attention - limited upside

The 3 months correlation between Haemonetics and Alcon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Alcon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcon AG and Haemonetics 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 Haemonetics 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 Haemonetics i.e., Haemonetics and Alcon AG go up and down completely randomly.

Pair Corralation between Haemonetics and Alcon AG

Considering the 90-day investment horizon Haemonetics is expected to under-perform the Alcon AG. In addition to that, Haemonetics is 1.54 times more volatile than Alcon AG. It trades about -0.11 of its total potential returns per unit of risk. Alcon AG is currently generating about 0.13 per unit of volatility. If you would invest  8,475  in Alcon AG on December 29, 2024 and sell it today you would earn a total of  1,102  from holding Alcon AG or generate 13.0% return on investment over 90 days.

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

Haemonetics  vs.  Alcon AG

Haemonetics

Risk-Adjusted Performance

Very Weak

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

Alcon AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alcon AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Alcon AG exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haemonetics and Alcon AG

The main advantage of trading using opposite Haemonetics and Alcon AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haemonetics 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 Haemonetics 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.