Correlation Between Bausch Lomb and Aurora Acquisition
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Aurora Acquisition 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 Aurora Acquisition 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 Aurora Acquisition Corp, you can compare the effects of market volatilities on Bausch Lomb and Aurora Acquisition 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 Aurora Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Aurora Acquisition.
Diversification Opportunities for Bausch Lomb and Aurora Acquisition
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bausch and Aurora is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp 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 Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Aurora Acquisition go up and down completely randomly.
Pair Corralation between Bausch Lomb and Aurora Acquisition
If you would invest 1,083 in Aurora Acquisition Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Aurora Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Aurora Acquisition Corp
Performance |
| Timeline |
| Bausch Lomb Corp |
| Aurora Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bausch Lomb and Aurora Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Aurora Acquisition
The main advantage of trading using opposite Bausch Lomb and Aurora Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Aurora Acquisition 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 Aurora Acquisition will offset losses from the drop in Aurora Acquisition's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Aurora Acquisition vs. BBB Foods | Aurora Acquisition vs. Hudson Pacific Properties | Aurora Acquisition vs. Bridgford Foods | Aurora Acquisition vs. Lifevantage |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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