Correlation Between Bausch Health and Hisamitsu Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical Co, you can compare the effects of market volatilities on Bausch Health and Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Hisamitsu Pharmaceutical.
Diversification Opportunities for Bausch Health and Hisamitsu Pharmaceutical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bausch and Hisamitsu is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Hisamitsu Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisamitsu Pharmaceutical has no effect on the direction of Bausch Health i.e., Bausch Health and Hisamitsu Pharmaceutical go up and down completely randomly.
Pair Corralation between Bausch Health and Hisamitsu Pharmaceutical
Considering the 90-day investment horizon Bausch Health Companies is expected to generate 0.07 times more return on investment than Hisamitsu Pharmaceutical. However, Bausch Health Companies is 14.68 times less risky than Hisamitsu Pharmaceutical. It trades about 0.03 of its potential returns per unit of risk. Hisamitsu Pharmaceutical Co is currently generating about -0.15 per unit of risk. If you would invest 653.00 in Bausch Health Companies on September 12, 2024 and sell it today you would earn a total of 105.50 from holding Bausch Health Companies or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 29.29% |
| Values | Daily Returns |
Bausch Health Companies vs. Hisamitsu Pharmaceutical Co
Performance |
| Timeline |
| Bausch Health Companies |
| Hisamitsu Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bausch Health and Hisamitsu Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Hisamitsu Pharmaceutical
The main advantage of trading using opposite Bausch Health and Hisamitsu Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical will offset losses from the drop in Hisamitsu Pharmaceutical's long position.| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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