Correlation Between Bausch Health and Evaxion Biotech
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Evaxion Biotech 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 Evaxion Biotech 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 Evaxion Biotech AS, you can compare the effects of market volatilities on Bausch Health and Evaxion Biotech 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 Evaxion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Evaxion Biotech.
Diversification Opportunities for Bausch Health and Evaxion Biotech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Evaxion is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Evaxion Biotech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaxion Biotech AS 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 Evaxion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaxion Biotech AS has no effect on the direction of Bausch Health i.e., Bausch Health and Evaxion Biotech go up and down completely randomly.
Pair Corralation between Bausch Health and Evaxion Biotech
Considering the 90-day investment horizon Bausch Health Companies is expected to generate 0.59 times more return on investment than Evaxion Biotech. However, Bausch Health Companies is 1.69 times less risky than Evaxion Biotech. It trades about 0.09 of its potential returns per unit of risk. Evaxion Biotech AS is currently generating about -0.07 per unit of risk. If you would invest 620.00 in Bausch Health Companies on September 2, 2024 and sell it today you would earn a total of 217.00 from holding Bausch Health Companies or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Evaxion Biotech AS
Performance |
| Timeline |
| Bausch Health Companies |
| Evaxion Biotech AS |
Bausch Health and Evaxion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Evaxion Biotech
The main advantage of trading using opposite Bausch Health and Evaxion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Evaxion Biotech 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 Evaxion Biotech will offset losses from the drop in Evaxion Biotech's long position.| Bausch Health vs. Crinetics Pharmaceuticals | Bausch Health vs. Enanta Pharmaceuticals | Bausch Health vs. Amicus Therapeutics | Bausch Health vs. Connect Biopharma Holdings |
| Evaxion Biotech vs. Tff Pharmaceuticals | Evaxion Biotech vs. Eliem Therapeutics | Evaxion Biotech vs. Inhibrx | Evaxion Biotech vs. Enliven Therapeutics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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