Correlation Between Superior Plus and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Bausch Health Companies, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Bausch Health.
Diversification Opportunities for Superior Plus and Bausch Health
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Bausch is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Bausch Health go up and down completely randomly.
Pair Corralation between Superior Plus and Bausch Health
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.46 times more return on investment than Bausch Health. However, Superior Plus is 1.46 times more volatile than Bausch Health Companies. It trades about 0.03 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.01 per unit of risk. If you would invest 414.00 in Superior Plus Corp on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Superior Plus Corp or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. Bausch Health Companies
Performance |
| Timeline |
| Superior Plus Corp |
| Bausch Health Companies |
Superior Plus and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Bausch Health
The main advantage of trading using opposite Superior Plus and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
| Bausch Health vs. Superior Plus Corp | Bausch Health vs. NMI Holdings | Bausch Health vs. SIVERS SEMICONDUCTORS AB | Bausch Health vs. Talanx AG |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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