Correlation Between Baxter International and Intelligent Bio
Can any of the company-specific risk be diversified away by investing in both Baxter International and Intelligent Bio 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 Baxter International and Intelligent Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Intelligent Bio Solutions, you can compare the effects of market volatilities on Baxter International and Intelligent Bio 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 Baxter International with a short position of Intelligent Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Intelligent Bio.
Diversification Opportunities for Baxter International and Intelligent Bio
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baxter and Intelligent is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Intelligent Bio Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Bio Solutions and Baxter International 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 Baxter International are associated (or correlated) with Intelligent Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Bio Solutions has no effect on the direction of Baxter International i.e., Baxter International and Intelligent Bio go up and down completely randomly.
Pair Corralation between Baxter International and Intelligent Bio
Considering the 90-day investment horizon Baxter International is expected to under-perform the Intelligent Bio. But the stock apears to be less risky and, when comparing its historical volatility, Baxter International is 4.31 times less risky than Intelligent Bio. The stock trades about -0.19 of its potential returns per unit of risk. The Intelligent Bio Solutions is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 141.00 in Intelligent Bio Solutions on September 4, 2024 and sell it today you would earn a total of 25.00 from holding Intelligent Bio Solutions or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baxter International vs. Intelligent Bio Solutions
Performance |
| Timeline |
| Baxter International |
| Intelligent Bio Solutions |
Baxter International and Intelligent Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baxter International and Intelligent Bio
The main advantage of trading using opposite Baxter International and Intelligent Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International position performs unexpectedly, Intelligent Bio 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 Intelligent Bio will offset losses from the drop in Intelligent Bio's long position.| Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
| Intelligent Bio vs. Baxter International | Intelligent Bio vs. West Pharmaceutical Services | Intelligent Bio vs. ResMed Inc | Intelligent Bio vs. The Cooper Companies, |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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