Correlation Between Bausch Lomb and JIADE LIMITED
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and JIADE LIMITED 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 JIADE LIMITED 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 JIADE LIMITED Common, you can compare the effects of market volatilities on Bausch Lomb and JIADE LIMITED 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 JIADE LIMITED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and JIADE LIMITED.
Diversification Opportunities for Bausch Lomb and JIADE LIMITED
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and JIADE is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and JIADE LIMITED Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIADE LIMITED Common 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 JIADE LIMITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIADE LIMITED Common has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and JIADE LIMITED go up and down completely randomly.
Pair Corralation between Bausch Lomb and JIADE LIMITED
Given the investment horizon of 90 days Bausch Lomb is expected to generate 8.7 times less return on investment than JIADE LIMITED. But when comparing it to its historical volatility, Bausch Lomb Corp is 8.77 times less risky than JIADE LIMITED. It trades about 0.03 of its potential returns per unit of risk. JIADE LIMITED Common is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 407.00 in JIADE LIMITED Common on September 2, 2024 and sell it today you would lose (337.00) from holding JIADE LIMITED Common or give up 82.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 28.02% |
| Values | Daily Returns |
Bausch Lomb Corp vs. JIADE LIMITED Common
Performance |
| Timeline |
| Bausch Lomb Corp |
| JIADE LIMITED Common |
Bausch Lomb and JIADE LIMITED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and JIADE LIMITED
The main advantage of trading using opposite Bausch Lomb and JIADE LIMITED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, JIADE LIMITED 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 JIADE LIMITED will offset losses from the drop in JIADE LIMITED's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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