Correlation Between Bausch Health and National Bank
Can any of the company-specific risk be diversified away by investing in both Bausch Health and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Bausch Health and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and National Bank.
Diversification Opportunities for Bausch Health and National Bank
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and National is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Bausch Health i.e., Bausch Health and National Bank go up and down completely randomly.
Pair Corralation between Bausch Health and National Bank
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the National Bank. In addition to that, Bausch Health is 122.46 times more volatile than National Bank of. It trades about -0.1 of its total potential returns per unit of risk. National Bank of is currently generating about 0.38 per unit of volatility. If you would invest 2,495 in National Bank of on November 27, 2024 and sell it today you would earn a total of 5.00 from holding National Bank of or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Bausch Health Companies vs. National Bank of
Performance |
| Timeline |
| Bausch Health Companies |
| National Bank |
Bausch Health and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and National Bank
The main advantage of trading using opposite Bausch Health and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
| National Bank vs. Black Mammoth Metals | National Bank vs. GoldQuest Mining Corp | National Bank vs. Pace Metals | National Bank vs. Solid Impact Investments |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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