Correlation Between Bausch Health and Evolus
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Evolus 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 Evolus 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 Evolus Inc, you can compare the effects of market volatilities on Bausch Health and Evolus 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 Evolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Evolus.
Diversification Opportunities for Bausch Health and Evolus
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bausch and Evolus is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus Inc 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 Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of Bausch Health i.e., Bausch Health and Evolus go up and down completely randomly.
Pair Corralation between Bausch Health and Evolus
Considering the 90-day investment horizon Bausch Health is expected to generate 2.26 times less return on investment than Evolus. In addition to that, Bausch Health is 1.01 times more volatile than Evolus Inc. It trades about 0.02 of its total potential returns per unit of risk. Evolus Inc is currently generating about 0.05 per unit of volatility. If you would invest 751.00 in Evolus Inc on September 2, 2024 and sell it today you would earn a total of 618.00 from holding Evolus Inc or generate 82.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Evolus Inc
Performance |
| Timeline |
| Bausch Health Companies |
| Evolus Inc |
Bausch Health and Evolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Evolus
The main advantage of trading using opposite Bausch Health and Evolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Evolus 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 Evolus will offset losses from the drop in Evolus' long position.| Bausch Health vs. Crinetics Pharmaceuticals | Bausch Health vs. Enanta Pharmaceuticals | Bausch Health vs. Amicus Therapeutics | Bausch Health vs. Connect Biopharma Holdings |
| Evolus vs. Crinetics Pharmaceuticals | Evolus vs. Enanta Pharmaceuticals | Evolus vs. Amicus Therapeutics | Evolus vs. Connect Biopharma Holdings |
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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