Correlation Between Bausch Health and Celestica
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Celestica 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 Celestica 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 Celestica, you can compare the effects of market volatilities on Bausch Health and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Celestica.
Diversification Opportunities for Bausch Health and Celestica
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Celestica is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Bausch Health i.e., Bausch Health and Celestica go up and down completely randomly.
Pair Corralation between Bausch Health and Celestica
Assuming the 90 days trading horizon Bausch Health is expected to generate 9.19 times less return on investment than Celestica. In addition to that, Bausch Health is 1.02 times more volatile than Celestica. It trades about 0.04 of its total potential returns per unit of risk. Celestica is currently generating about 0.39 per unit of volatility. If you would invest 14,029 in Celestica on October 23, 2024 and sell it today you would earn a total of 2,412 from holding Celestica or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Celestica
Performance |
| Timeline |
| Bausch Health Companies |
| Celestica |
Bausch Health and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Celestica
The main advantage of trading using opposite Bausch Health and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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