Correlation Between Bausch Health and OAKTRSPECLENDNEW
Can any of the company-specific risk be diversified away by investing in both Bausch Health and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Bausch Health and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and OAKTRSPECLENDNEW.
Diversification Opportunities for Bausch Health and OAKTRSPECLENDNEW
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bausch and OAKTRSPECLENDNEW is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Bausch Health i.e., Bausch Health and OAKTRSPECLENDNEW go up and down completely randomly.
Pair Corralation between Bausch Health and OAKTRSPECLENDNEW
Assuming the 90 days horizon Bausch Health Companies is expected to generate 2.4 times more return on investment than OAKTRSPECLENDNEW. However, Bausch Health is 2.4 times more volatile than OAKTRSPECLENDNEW. It trades about 0.02 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.0 per unit of risk. If you would invest 701.00 in Bausch Health Companies on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Bausch Health Companies or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. OAKTRSPECLENDNEW
Performance |
| Timeline |
| Bausch Health Companies |
| OAKTRSPECLENDNEW |
Bausch Health and OAKTRSPECLENDNEW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and OAKTRSPECLENDNEW
The main advantage of trading using opposite Bausch Health and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.The idea behind Bausch Health Companies and OAKTRSPECLENDNEW 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.| OAKTRSPECLENDNEW vs. FANDIFI TECHNOLOGY P | OAKTRSPECLENDNEW vs. X FAB Silicon Foundries | OAKTRSPECLENDNEW vs. SMA Solar Technology | OAKTRSPECLENDNEW vs. Japan Asia Investment |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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