Correlation Between Bausch Health and Rogers Sugar
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar, you can compare the effects of market volatilities on Bausch Health and Rogers Sugar 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 Rogers Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Rogers Sugar.
Diversification Opportunities for Bausch Health and Rogers Sugar
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Rogers is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Rogers Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Sugar 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 Rogers Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Sugar has no effect on the direction of Bausch Health i.e., Bausch Health and Rogers Sugar go up and down completely randomly.
Pair Corralation between Bausch Health and Rogers Sugar
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Rogers Sugar. In addition to that, Bausch Health is 5.94 times more volatile than Rogers Sugar. It trades about -0.01 of its total potential returns per unit of risk. Rogers Sugar is currently generating about 0.19 per unit of volatility. If you would invest 558.00 in Rogers Sugar on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Rogers Sugar or generate 2.69% 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. Rogers Sugar
Performance |
| Timeline |
| Bausch Health Companies |
| Rogers Sugar |
Bausch Health and Rogers Sugar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Rogers Sugar
The main advantage of trading using opposite Bausch Health and Rogers Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Rogers Sugar 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 Rogers Sugar will offset losses from the drop in Rogers Sugar's long position.| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
| Rogers Sugar vs. Extendicare | Rogers Sugar vs. Pizza Pizza Royalty | Rogers Sugar vs. Chemtrade Logistics Income | Rogers Sugar vs. Sienna Senior Living |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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