Correlation Between Bausch Lomb and Assurant
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Assurant 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 Lomb and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Lomb Corp and Assurant, you can compare the effects of market volatilities on Bausch Lomb and Assurant 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 Lomb with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Assurant.
Diversification Opportunities for Bausch Lomb and Assurant
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bausch and Assurant is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Bausch Lomb 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 Lomb Corp are associated (or correlated) with Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Assurant go up and down completely randomly.
Pair Corralation between Bausch Lomb and Assurant
Given the investment horizon of 90 days Bausch Lomb is expected to generate 2.34 times less return on investment than Assurant. In addition to that, Bausch Lomb is 1.48 times more volatile than Assurant. It trades about 0.03 of its total potential returns per unit of risk. Assurant is currently generating about 0.09 per unit of volatility. If you would invest 12,196 in Assurant on September 3, 2024 and sell it today you would earn a total of 10,377 from holding Assurant or generate 85.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Assurant
Performance |
| Timeline |
| Bausch Lomb Corp |
| Assurant |
Bausch Lomb and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Assurant
The main advantage of trading using opposite Bausch Lomb and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Assurant 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 Assurant will offset losses from the drop in Assurant's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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