Correlation Between Bausch Health and MSCI
Can any of the company-specific risk be diversified away by investing in both Bausch Health and MSCI 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 Health and MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Health Companies and MSCI Inc, you can compare the effects of market volatilities on Bausch Health and MSCI 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 Health with a short position of MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and MSCI.
Diversification Opportunities for Bausch Health and MSCI
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and MSCI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc and Bausch Health 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 Health Companies are associated (or correlated) with MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Bausch Health i.e., Bausch Health and MSCI go up and down completely randomly.
Pair Corralation between Bausch Health and MSCI
Assuming the 90 days horizon Bausch Health Companies is expected to generate 2.12 times more return on investment than MSCI. However, Bausch Health is 2.12 times more volatile than MSCI Inc. It trades about 0.02 of its potential returns per unit of risk. MSCI Inc is currently generating about 0.03 per unit of risk. If you would invest 704.00 in Bausch Health Companies on September 4, 2024 and sell it today you would earn a total of 79.00 from holding Bausch Health Companies or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bausch Health Companies vs. MSCI Inc
Performance |
| Timeline |
| Bausch Health Companies |
| MSCI Inc |
Bausch Health and MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and MSCI
The main advantage of trading using opposite Bausch Health and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, MSCI 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 MSCI will offset losses from the drop in MSCI's long position.The idea behind Bausch Health Companies and MSCI Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MSCI vs. Universal Entertainment | MSCI vs. Charter Communications | MSCI vs. Chunghwa Telecom Co | MSCI vs. COMBA TELECOM SYST |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |