Correlation Between Bausch Lomb and Peoples Educational
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Peoples Educational 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 Peoples Educational 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 Peoples Educational Holdings, you can compare the effects of market volatilities on Bausch Lomb and Peoples Educational 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 Peoples Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Peoples Educational.
Diversification Opportunities for Bausch Lomb and Peoples Educational
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bausch and Peoples is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Peoples Educational Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Educational 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 Peoples Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Educational has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Peoples Educational go up and down completely randomly.
Pair Corralation between Bausch Lomb and Peoples Educational
Given the investment horizon of 90 days Bausch Lomb is expected to generate 37.7 times less return on investment than Peoples Educational. But when comparing it to its historical volatility, Bausch Lomb Corp is 36.82 times less risky than Peoples Educational. It trades about 0.1 of its potential returns per unit of risk. Peoples Educational Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Peoples Educational Holdings on August 24, 2024 and sell it today you would earn a total of 1.99 from holding Peoples Educational Holdings or generate 19900.0% 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. Peoples Educational Holdings
Performance |
| Timeline |
| Bausch Lomb Corp |
| Peoples Educational |
Bausch Lomb and Peoples Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Peoples Educational
The main advantage of trading using opposite Bausch Lomb and Peoples Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Peoples Educational 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 Peoples Educational will offset losses from the drop in Peoples Educational'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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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