Correlation Between Bausch Health and Crinetics Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals, you can compare the effects of market volatilities on Bausch Health and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Crinetics Pharmaceuticals.
Diversification Opportunities for Bausch Health and Crinetics Pharmaceuticals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Crinetics is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crinetics Pharmaceuticals has no effect on the direction of Bausch Health i.e., Bausch Health and Crinetics Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bausch Health and Crinetics Pharmaceuticals
Considering the 90-day investment horizon Bausch Health Companies is expected to under-perform the Crinetics Pharmaceuticals. In addition to that, Bausch Health is 1.17 times more volatile than Crinetics Pharmaceuticals. It trades about -0.15 of its total potential returns per unit of risk. Crinetics Pharmaceuticals is currently generating about 0.06 per unit of volatility. If you would invest 5,596 in Crinetics Pharmaceuticals on September 1, 2024 and sell it today you would earn a total of 124.00 from holding Crinetics Pharmaceuticals or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Crinetics Pharmaceuticals
Performance |
| Timeline |
| Bausch Health Companies |
| Crinetics Pharmaceuticals |
Bausch Health and Crinetics Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Crinetics Pharmaceuticals
The main advantage of trading using opposite Bausch Health and Crinetics Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals will offset losses from the drop in Crinetics Pharmaceuticals' long position.| Bausch Health vs. Crinetics Pharmaceuticals | Bausch Health vs. Enanta Pharmaceuticals | Bausch Health vs. Amicus Therapeutics | Bausch Health vs. Connect Biopharma Holdings |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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