Correlation Between Bausch Health and Air Products
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on Bausch Health and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Air Products.
Diversification Opportunities for Bausch Health and Air Products
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Air is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Bausch Health i.e., Bausch Health and Air Products go up and down completely randomly.
Pair Corralation between Bausch Health and Air Products
Assuming the 90 days horizon Bausch Health is expected to generate 7.84 times less return on investment than Air Products. In addition to that, Bausch Health is 1.73 times more volatile than Air Products and. It trades about 0.01 of its total potential returns per unit of risk. Air Products and is currently generating about 0.17 per unit of volatility. If you would invest 29,550 in Air Products and on August 29, 2024 and sell it today you would earn a total of 2,120 from holding Air Products and or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Air Products and
Performance |
| Timeline |
| Bausch Health Companies |
| Air Products |
Bausch Health and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Air Products
The main advantage of trading using opposite Bausch Health and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Bausch Health vs. Shionogi Co | Bausch Health vs. Ipsen SA | Bausch Health vs. Dr Reddys Laboratories | Bausch Health vs. Superior Plus Corp |
| Air Products vs. Natural Health Trends | Air Products vs. Bausch Health Companies | Air Products vs. Harmony Gold Mining | Air Products vs. GRUPO CARSO A1 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |