Correlation Between Bausch Health and CVW CleanTech
Can any of the company-specific risk be diversified away by investing in both Bausch Health and CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech, you can compare the effects of market volatilities on Bausch Health and CVW CleanTech 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 CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and CVW CleanTech.
Diversification Opportunities for Bausch Health and CVW CleanTech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and CVW is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech 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 CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Bausch Health i.e., Bausch Health and CVW CleanTech go up and down completely randomly.
Pair Corralation between Bausch Health and CVW CleanTech
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the CVW CleanTech. In addition to that, Bausch Health is 1.88 times more volatile than CVW CleanTech. It trades about -0.01 of its total potential returns per unit of risk. CVW CleanTech is currently generating about 0.04 per unit of volatility. If you would invest 85.00 in CVW CleanTech on August 27, 2024 and sell it today you would earn a total of 1.00 from holding CVW CleanTech or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. CVW CleanTech
Performance |
| Timeline |
| Bausch Health Companies |
| CVW CleanTech |
Bausch Health and CVW CleanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and CVW CleanTech
The main advantage of trading using opposite Bausch Health and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.| Bausch Health vs. Auxly Cannabis Group | Bausch Health vs. Entourage Health Corp | Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Altagas Cum Red |
| CVW CleanTech vs. First Majestic Silver | CVW CleanTech vs. Ivanhoe Energy | CVW CleanTech vs. Orezone Gold Corp | CVW CleanTech vs. Faraday Copper Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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