Correlation Between Bausch Health and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Phibro Animal 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 Phibro Animal 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 Phibro Animal Health, you can compare the effects of market volatilities on Bausch Health and Phibro Animal 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 Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Phibro Animal.
Diversification Opportunities for Bausch Health and Phibro Animal
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Phibro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health 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 Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of Bausch Health i.e., Bausch Health and Phibro Animal go up and down completely randomly.
Pair Corralation between Bausch Health and Phibro Animal
Considering the 90-day investment horizon Bausch Health Companies is expected to under-perform the Phibro Animal. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Health Companies is 1.09 times less risky than Phibro Animal. The stock trades about -0.05 of its potential returns per unit of risk. The Phibro Animal Health is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,097 in Phibro Animal Health on November 28, 2024 and sell it today you would earn a total of 115.00 from holding Phibro Animal Health or generate 5.48% 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. Phibro Animal Health
Performance |
| Timeline |
| Bausch Health Companies |
| Phibro Animal Health |
Bausch Health and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Phibro Animal
The main advantage of trading using opposite Bausch Health and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Phibro Animal 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| Bausch Health vs. Viatris | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc | Bausch Health vs. Emergent Biosolutions |
| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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