Correlation Between Bausch Health and Tonix Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals 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 Tonix Pharmaceuticals Holding, you can compare the effects of market volatilities on Bausch Health and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Tonix Pharmaceuticals.
Diversification Opportunities for Bausch Health and Tonix Pharmaceuticals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Tonix is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Tonix Pharmaceuticals Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonix Pharmaceuticals 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 Tonix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonix Pharmaceuticals has no effect on the direction of Bausch Health i.e., Bausch Health and Tonix Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bausch Health and Tonix Pharmaceuticals
Considering the 90-day investment horizon Bausch Health Companies is expected to under-perform the Tonix Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Health Companies is 3.31 times less risky than Tonix Pharmaceuticals. The stock trades about -0.23 of its potential returns per unit of risk. The Tonix Pharmaceuticals Holding is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Tonix Pharmaceuticals Holding on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Tonix Pharmaceuticals Holding or generate 35.71% 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. Tonix Pharmaceuticals Holding
Performance |
| Timeline |
| Bausch Health Companies |
| Tonix Pharmaceuticals |
Bausch Health and Tonix Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Tonix Pharmaceuticals
The main advantage of trading using opposite Bausch Health and Tonix Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Tonix Pharmaceuticals 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 Tonix Pharmaceuticals will offset losses from the drop in Tonix Pharmaceuticals' long position.| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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