Correlation Between Bausch Lomb and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on Bausch Lomb and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Mativ Holdings.
Diversification Opportunities for Bausch Lomb and Mativ Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bausch and Mativ is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Mativ Holdings go up and down completely randomly.
Pair Corralation between Bausch Lomb and Mativ Holdings
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 0.58 times more return on investment than Mativ Holdings. However, Bausch Lomb Corp is 1.73 times less risky than Mativ Holdings. It trades about 0.04 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,521 in Bausch Lomb Corp on August 30, 2024 and sell it today you would earn a total of 476.00 from holding Bausch Lomb Corp or generate 31.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Mativ Holdings
Performance |
| Timeline |
| Bausch Lomb Corp |
| Mativ Holdings |
Bausch Lomb and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Mativ Holdings
The main advantage of trading using opposite Bausch Lomb and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| Bausch Lomb vs. Femasys | Bausch Lomb vs. Sharps Technology Warrant | Bausch Lomb vs. GlucoTrack | Bausch Lomb vs. Walt Disney |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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