Correlation Between ARDAGH METAL and Bausch Health
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Bausch Health 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 ARDAGH METAL and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Bausch Health Companies, you can compare the effects of market volatilities on ARDAGH METAL and Bausch Health 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 ARDAGH METAL with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Bausch Health.
Diversification Opportunities for ARDAGH METAL and Bausch Health
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARDAGH and Bausch is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Bausch Health go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Bausch Health
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Bausch Health. In addition to that, ARDAGH METAL is 1.46 times more volatile than Bausch Health Companies. It trades about -0.1 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about 0.07 per unit of volatility. If you would invest 708.00 in Bausch Health Companies on October 24, 2024 and sell it today you would earn a total of 20.00 from holding Bausch Health Companies or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Bausch Health Companies
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Bausch Health Companies |
ARDAGH METAL and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Bausch Health
The main advantage of trading using opposite ARDAGH METAL and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Bausch Health 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 Bausch Health will offset losses from the drop in Bausch Health's long position.| ARDAGH METAL vs. TELECOM ITALRISP ADR10 | ARDAGH METAL vs. Computershare Limited | ARDAGH METAL vs. PACIFIC ONLINE | ARDAGH METAL vs. GungHo Online Entertainment |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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