Correlation Between Bausch Lomb and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Jutal Offshore 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 Jutal Offshore 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 Jutal Offshore Oil, you can compare the effects of market volatilities on Bausch Lomb and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Jutal Offshore.
Diversification Opportunities for Bausch Lomb and Jutal Offshore
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bausch and Jutal is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Jutal Offshore go up and down completely randomly.
Pair Corralation between Bausch Lomb and Jutal Offshore
Given the investment horizon of 90 days Bausch Lomb is expected to generate 1.2 times less return on investment than Jutal Offshore. But when comparing it to its historical volatility, Bausch Lomb Corp is 1.74 times less risky than Jutal Offshore. It trades about 0.05 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,558 in Jutal Offshore Oil on September 2, 2024 and sell it today you would earn a total of 352.00 from holding Jutal Offshore Oil or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Jutal Offshore Oil
Performance |
| Timeline |
| Bausch Lomb Corp |
| Jutal Offshore Oil |
Bausch Lomb and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Jutal Offshore
The main advantage of trading using opposite Bausch Lomb and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Jutal Offshore vs. Fidus Investment Corp | Jutal Offshore vs. BTB Real Estate | Jutal Offshore vs. Western Asset Investment | Jutal Offshore vs. Vita Coco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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