Correlation Between Altagas Cum and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Altagas Cum 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 Altagas Cum and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altagas Cum Red and Bausch Health Companies, you can compare the effects of market volatilities on Altagas Cum 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 Altagas Cum with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and Bausch Health.
Diversification Opportunities for Altagas Cum and Bausch Health
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altagas and Bausch is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red 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 Altagas Cum 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 Altagas Cum Red 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 Altagas Cum i.e., Altagas Cum and Bausch Health go up and down completely randomly.
Pair Corralation between Altagas Cum and Bausch Health
Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 0.32 times more return on investment than Bausch Health. However, Altagas Cum Red is 3.11 times less risky than Bausch Health. It trades about 0.08 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 1,353 in Altagas Cum Red on January 21, 2025 and sell it today you would earn a total of 638.00 from holding Altagas Cum Red or generate 47.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altagas Cum Red vs. Bausch Health Companies
Performance |
| Timeline |
| Altagas Cum Red |
| Bausch Health Companies |
Altagas Cum and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altagas Cum and Bausch Health
The main advantage of trading using opposite Altagas Cum and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum 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.| Altagas Cum vs. 1911 Gold Corp | Altagas Cum vs. Guru Organic Energy | Altagas Cum vs. Hydro One | Altagas Cum vs. UBER CDR |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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