Correlation Between Acorda Therapeutics and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Acorda Therapeutics 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 Acorda Therapeutics and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acorda Therapeutics and Bausch Health Companies, you can compare the effects of market volatilities on Acorda Therapeutics 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 Acorda Therapeutics with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acorda Therapeutics and Bausch Health.
Diversification Opportunities for Acorda Therapeutics and Bausch Health
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Acorda and Bausch is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Acorda Therapeutics 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 Acorda Therapeutics 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 Acorda Therapeutics 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 Acorda Therapeutics i.e., Acorda Therapeutics and Bausch Health go up and down completely randomly.
Pair Corralation between Acorda Therapeutics and Bausch Health
If you would invest 656.00 in Bausch Health Companies on August 29, 2024 and sell it today you would earn a total of 133.00 from holding Bausch Health Companies or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Acorda Therapeutics vs. Bausch Health Companies
Performance |
| Timeline |
| Acorda Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bausch Health Companies |
Acorda Therapeutics and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acorda Therapeutics and Bausch Health
The main advantage of trading using opposite Acorda Therapeutics and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acorda Therapeutics 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.| Acorda Therapeutics vs. Shionogi Co | Acorda Therapeutics vs. Pacira BioSciences, | Acorda Therapeutics vs. Sunshine Biopharma Warrant | Acorda Therapeutics vs. Biofrontera |
| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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