Correlation Between Bausch Health and Jamieson Wellness
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Jamieson Wellness 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 Jamieson Wellness 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 Jamieson Wellness, you can compare the effects of market volatilities on Bausch Health and Jamieson Wellness 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 Jamieson Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Jamieson Wellness.
Diversification Opportunities for Bausch Health and Jamieson Wellness
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Jamieson is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness 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 Jamieson Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jamieson Wellness has no effect on the direction of Bausch Health i.e., Bausch Health and Jamieson Wellness go up and down completely randomly.
Pair Corralation between Bausch Health and Jamieson Wellness
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Jamieson Wellness. In addition to that, Bausch Health is 2.0 times more volatile than Jamieson Wellness. It trades about -0.01 of its total potential returns per unit of risk. Jamieson Wellness is currently generating about 0.16 per unit of volatility. If you would invest 3,449 in Jamieson Wellness on August 28, 2024 and sell it today you would earn a total of 211.00 from holding Jamieson Wellness or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Jamieson Wellness
Performance |
| Timeline |
| Bausch Health Companies |
| Jamieson Wellness |
Bausch Health and Jamieson Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Jamieson Wellness
The main advantage of trading using opposite Bausch Health and Jamieson Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Jamieson Wellness 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 Jamieson Wellness will offset losses from the drop in Jamieson Wellness' 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 |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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