Correlation Between Alaska Energy and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Alaska Energy 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 Alaska Energy and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Bausch Health Companies, you can compare the effects of market volatilities on Alaska Energy 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 Alaska Energy with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Bausch Health.
Diversification Opportunities for Alaska Energy and Bausch Health
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and Bausch is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals 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 Alaska Energy 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 Alaska Energy Metals 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 Alaska Energy i.e., Alaska Energy and Bausch Health go up and down completely randomly.
Pair Corralation between Alaska Energy and Bausch Health
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Bausch Health. In addition to that, Alaska Energy is 2.6 times more volatile than Bausch Health Companies. It trades about -0.02 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about 0.02 per unit of volatility. If you would invest 1,146 in Bausch Health Companies on September 12, 2024 and sell it today you would earn a total of 34.00 from holding Bausch Health Companies or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. Bausch Health Companies
Performance |
| Timeline |
| Alaska Energy Metals |
| Bausch Health Companies |
Alaska Energy and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Bausch Health
The main advantage of trading using opposite Alaska Energy and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy 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.| Alaska Energy vs. Datable Technology Corp | Alaska Energy vs. NeXGold Mining Corp | Alaska Energy vs. Renoworks Software | Alaska Energy vs. HPQ Silicon Resources |
| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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