Correlation Between Bausch Lomb and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on Bausch Lomb and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Playtika Holding.
Diversification Opportunities for Bausch Lomb and Playtika Holding
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Playtika is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Playtika Holding go up and down completely randomly.
Pair Corralation between Bausch Lomb and Playtika Holding
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 1.37 times more return on investment than Playtika Holding. However, Bausch Lomb is 1.37 times more volatile than Playtika Holding Corp. It trades about 0.12 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.02 per unit of risk. If you would invest 1,509 in Bausch Lomb Corp on September 12, 2024 and sell it today you would earn a total of 556.00 from holding Bausch Lomb Corp or generate 36.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Playtika Holding Corp
Performance |
| Timeline |
| Bausch Lomb Corp |
| Playtika Holding Corp |
Bausch Lomb and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Playtika Holding
The main advantage of trading using opposite Bausch Lomb and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Playtika Holding vs. GDEV Inc | Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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