Correlation Between Bausch Health and Apple
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Apple 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 Bausch Health and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Health Companies and Apple Inc CDR, you can compare the effects of market volatilities on Bausch Health and Apple 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 Bausch Health with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Apple.
Diversification Opportunities for Bausch Health and Apple
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bausch and Apple is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Bausch Health 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 Bausch Health Companies are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Bausch Health i.e., Bausch Health and Apple go up and down completely randomly.
Pair Corralation between Bausch Health and Apple
Assuming the 90 days trading horizon Bausch Health Companies is expected to generate 1.49 times more return on investment than Apple. However, Bausch Health is 1.49 times more volatile than Apple Inc CDR. It trades about 0.01 of its potential returns per unit of risk. Apple Inc CDR is currently generating about -0.38 per unit of risk. If you would invest 1,111 in Bausch Health Companies on October 29, 2024 and sell it today you would lose (1.00) from holding Bausch Health Companies or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Apple Inc CDR
Performance |
| Timeline |
| Bausch Health Companies |
| Apple Inc CDR |
Bausch Health and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Apple
The main advantage of trading using opposite Bausch Health and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
| Apple vs. Sun Peak Metals | Apple vs. Cogeco Communications | Apple vs. Advent Wireless | Apple vs. North American Financial |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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