Correlation Between Bausch Health and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both Bausch Health and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on Bausch Health and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and COLUMBIA SPORTSWEAR.
Diversification Opportunities for Bausch Health and COLUMBIA SPORTSWEAR
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and COLUMBIA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of Bausch Health i.e., Bausch Health and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between Bausch Health and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon Bausch Health Companies is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, Bausch Health is 1.38 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.1 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about -0.02 per unit of volatility. If you would invest 8,000 in COLUMBIA SPORTSWEAR on December 11, 2024 and sell it today you would lose (250.00) from holding COLUMBIA SPORTSWEAR or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| Bausch Health Companies |
| COLUMBIA SPORTSWEAR |
Bausch Health and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite Bausch Health and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR's long position.| Bausch Health vs. Computershare Limited | Bausch Health vs. Beta Systems Software | Bausch Health vs. Kingdee International Software | Bausch Health vs. USU Software AG |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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