Correlation Between Bausch Health and Altagas Cum
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Altagas Cum 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 Altagas Cum 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 Altagas Cum Red, you can compare the effects of market volatilities on Bausch Health and Altagas Cum 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 Altagas Cum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Altagas Cum.
Diversification Opportunities for Bausch Health and Altagas Cum
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bausch and Altagas is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Altagas Cum Red in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altagas Cum Red 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 Altagas Cum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altagas Cum Red has no effect on the direction of Bausch Health i.e., Bausch Health and Altagas Cum go up and down completely randomly.
Pair Corralation between Bausch Health and Altagas Cum
Assuming the 90 days trading horizon Bausch Health Companies is expected to generate 3.05 times more return on investment than Altagas Cum. However, Bausch Health is 3.05 times more volatile than Altagas Cum Red. It trades about 0.03 of its potential returns per unit of risk. Altagas Cum Red is currently generating about 0.07 per unit of risk. If you would invest 1,009 in Bausch Health Companies on August 31, 2024 and sell it today you would earn a total of 186.00 from holding Bausch Health Companies or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bausch Health Companies vs. Altagas Cum Red
Performance |
| Timeline |
| Bausch Health Companies |
| Altagas Cum Red |
Bausch Health and Altagas Cum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Altagas Cum
The main advantage of trading using opposite Bausch Health and Altagas Cum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Altagas Cum 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 Altagas Cum will offset losses from the drop in Altagas Cum's long position.| Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Brompton European Dividend | Bausch Health vs. Solar Alliance Energy | Bausch Health vs. PHN Multi Style All Cap |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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