Correlation Between Alcon AG and PACS Group,

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

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

Diversification Opportunities for Alcon AG and PACS Group,

0.84

Correlation Coefficient

Alcon AG  PACS Group,

Very poor diversification

The 3 months correlation between Alcon and PACS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and PACS Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACS Group, 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 PACS Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACS Group, has no effect on the direction of Alcon AG i.e., Alcon AG and PACS Group, go up and down completely randomly.

Pair Corralation between Alcon AG and PACS Group,

Considering the 90-day investment horizon Alcon AG is expected to generate 0.18 times more return on investment than PACS Group,. However, Alcon AG is 5.48 times less risky than PACS Group,. It trades about -0.09 of its potential returns per unit of risk. PACS Group, is currently generating about -0.16 per unit of risk. If you would invest  9,441  in Alcon AG on September 5, 2024 and sell it today you would lose (707.00) from holding Alcon AG or give up 7.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Alcon AG  vs.  PACS Group,

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 latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

PACS Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACS Group, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Alcon AG and PACS Group,

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

The idea behind Alcon AG and PACS Group, 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.