Correlation Between Bausch Health and Regulus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Regulus Therapeutics 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 Regulus Therapeutics 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 Regulus Therapeutics, you can compare the effects of market volatilities on Bausch Health and Regulus Therapeutics 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 Regulus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Regulus Therapeutics.
Diversification Opportunities for Bausch Health and Regulus Therapeutics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Regulus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Regulus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Therapeutics 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 Regulus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Therapeutics has no effect on the direction of Bausch Health i.e., Bausch Health and Regulus Therapeutics go up and down completely randomly.
Pair Corralation between Bausch Health and Regulus Therapeutics
Considering the 90-day investment horizon Bausch Health Companies is expected to under-perform the Regulus Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Health Companies is 1.57 times less risky than Regulus Therapeutics. The stock trades about -0.31 of its potential returns per unit of risk. The Regulus Therapeutics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Regulus Therapeutics on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Regulus Therapeutics or generate 8.05% 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. Regulus Therapeutics
Performance |
| Timeline |
| Bausch Health Companies |
| Regulus Therapeutics |
Bausch Health and Regulus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Regulus Therapeutics
The main advantage of trading using opposite Bausch Health and Regulus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Regulus Therapeutics 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 Regulus Therapeutics will offset losses from the drop in Regulus Therapeutics' long position.| Bausch Health vs. Crinetics Pharmaceuticals | Bausch Health vs. Enanta Pharmaceuticals | Bausch Health vs. Amicus Therapeutics | Bausch Health vs. Connect Biopharma Holdings |
| Regulus Therapeutics vs. Tenax Therapeutics | Regulus Therapeutics vs. Verastem | Regulus Therapeutics vs. Pulmatrix | Regulus Therapeutics vs. Cellectar Biosciences |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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