Correlation Between Alcon AG and Co Diagnostics

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

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

Diversification Opportunities for Alcon AG and Co Diagnostics

-0.71

Correlation Coefficient

Alcon AG  Co Diagnostics

Pay attention - limited upside

The 3 months correlation between Alcon and CODX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alcon AG and Co Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Co Diagnostics 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 Co Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Co Diagnostics has no effect on the direction of Alcon AG i.e., Alcon AG and Co Diagnostics go up and down completely randomly.

Pair Corralation between Alcon AG and Co Diagnostics

Considering the 90-day investment horizon Alcon AG is expected to under-perform the Co Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Alcon AG is 6.02 times less risky than Co Diagnostics. The stock trades about -0.14 of its potential returns per unit of risk. The Co Diagnostics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  27.00  in Co Diagnostics on July 12, 2025 and sell it today you would earn a total of  11.00  from holding Co Diagnostics or generate 40.74% return on investment over 90 days.

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

Alcon AG  vs.  Co Diagnostics

Alcon AG

Risk-Adjusted Performance

Weakest

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 November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Co Diagnostics

Risk-Adjusted Performance

Fair

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

Pair Trading with Alcon AG and Co Diagnostics

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

The idea behind Alcon AG and Co Diagnostics 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.