Correlation Between Alcon AG and AngioDynamics

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

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

Diversification Opportunities for Alcon AG and AngioDynamics

-0.17

Correlation Coefficient

Alcon AG  AngioDynamics

Good diversification

The 3 months correlation between Alcon and AngioDynamics is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics 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 AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of Alcon AG i.e., Alcon AG and AngioDynamics go up and down completely randomly.

Pair Corralation between Alcon AG and AngioDynamics

Considering the 90-day investment horizon Alcon AG is expected to generate 1.37 times less return on investment than AngioDynamics. But when comparing it to its historical volatility, Alcon AG is 2.59 times less risky than AngioDynamics. It trades about 0.03 of its potential returns per unit of risk. AngioDynamics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  973.00  in AngioDynamics on February 11, 2025 and sell it today you would lose (16.00) from holding AngioDynamics or give up 1.64% of portfolio value over 90 days.

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

Alcon AG  vs.  AngioDynamics

Alcon AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alcon AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Alcon AG may actually be approaching a critical reversion point that can send shares even higher in June 2025.

AngioDynamics

Risk-Adjusted Performance

Very Weak

Over the last 90 days AngioDynamics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alcon AG and AngioDynamics

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

The idea behind Alcon AG and AngioDynamics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.