Correlation Between Bausch Health and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Northstar Clean 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 Northstar Clean 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 Northstar Clean Technologies, you can compare the effects of market volatilities on Bausch Health and Northstar Clean 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 Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Northstar Clean.
Diversification Opportunities for Bausch Health and Northstar Clean
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Northstar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech 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 Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Bausch Health i.e., Bausch Health and Northstar Clean go up and down completely randomly.
Pair Corralation between Bausch Health and Northstar Clean
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Northstar Clean. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Health Companies is 1.48 times less risky than Northstar Clean. The stock trades about -0.1 of its potential returns per unit of risk. The Northstar Clean Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Northstar Clean Technologies on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Northstar Clean Technologies or generate 16.0% 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. Northstar Clean Technologies
Performance |
| Timeline |
| Bausch Health Companies |
| Northstar Clean Tech |
Bausch Health and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Northstar Clean
The main advantage of trading using opposite Bausch Health and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean's long position.| Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Altagas Cum Red | Bausch Health vs. European Residential Real | Bausch Health vs. iShares Fundamental Hedged |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |