Correlation Between Bausch Health and Lipocine
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Bausch Health and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Lipocine.
Diversification Opportunities for Bausch Health and Lipocine
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Lipocine is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Bausch Health i.e., Bausch Health and Lipocine go up and down completely randomly.
Pair Corralation between Bausch Health and Lipocine
Considering the 90-day investment horizon Bausch Health Companies is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Health Companies is 1.42 times less risky than Lipocine. The stock trades about -0.22 of its potential returns per unit of risk. The Lipocine is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 510.00 in Lipocine on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Lipocine or generate 3.14% 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. Lipocine
Performance |
| Timeline |
| Bausch Health Companies |
| Lipocine |
Bausch Health and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Lipocine
The main advantage of trading using opposite Bausch Health and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc |
| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |