Correlation Between Bausch Lomb and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and HNI Corp 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 HNI Corp 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 HNI Corp, you can compare the effects of market volatilities on Bausch Lomb and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and HNI Corp.
Diversification Opportunities for Bausch Lomb and HNI Corp
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bausch and HNI is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and HNI Corp go up and down completely randomly.
Pair Corralation between Bausch Lomb and HNI Corp
Given the investment horizon of 90 days Bausch Lomb Corp is expected to under-perform the HNI Corp. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Lomb Corp is 1.09 times less risky than HNI Corp. The stock trades about -0.1 of its potential returns per unit of risk. The HNI Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,152 in HNI Corp on August 27, 2024 and sell it today you would earn a total of 465.00 from holding HNI Corp or generate 9.03% 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. HNI Corp
Performance |
| Timeline |
| Bausch Lomb Corp |
| HNI Corp |
Bausch Lomb and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and HNI Corp
The main advantage of trading using opposite Bausch Lomb and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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