Correlation Between Blucora and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both Blucora and Bausch Lomb 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 Blucora and Bausch Lomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blucora and Bausch Lomb Corp, you can compare the effects of market volatilities on Blucora and Bausch Lomb 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 Blucora with a short position of Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blucora and Bausch Lomb.
Diversification Opportunities for Blucora and Bausch Lomb
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blucora and Bausch is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Blucora and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp and Blucora 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 Blucora are associated (or correlated) with Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Blucora i.e., Blucora and Bausch Lomb go up and down completely randomly.
Pair Corralation between Blucora and Bausch Lomb
Given the investment horizon of 90 days Blucora is expected to generate 0.44 times more return on investment than Bausch Lomb. However, Blucora is 2.3 times less risky than Bausch Lomb. It trades about 0.34 of its potential returns per unit of risk. Bausch Lomb Corp is currently generating about 0.04 per unit of risk. If you would invest 2,523 in Blucora on September 12, 2024 and sell it today you would earn a total of 196.00 from holding Blucora or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.65% |
| Values | Daily Returns |
Blucora vs. Bausch Lomb Corp
Performance |
| Timeline |
| Blucora |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bausch Lomb Corp |
Blucora and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blucora and Bausch Lomb
The main advantage of trading using opposite Blucora and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blucora position performs unexpectedly, Bausch Lomb 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 Lomb will offset losses from the drop in Bausch Lomb's long position.| Blucora vs. Vera Bradley | Blucora vs. JD Sports Fashion | Blucora vs. Hasbro Inc | Blucora vs. Steven Madden |
| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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