Correlation Between Bausch Health and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy Corp, you can compare the effects of market volatilities on Bausch Health and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Hemisphere Energy.
Diversification Opportunities for Bausch Health and Hemisphere Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bausch and Hemisphere is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of Bausch Health i.e., Bausch Health and Hemisphere Energy go up and down completely randomly.
Pair Corralation between Bausch Health and Hemisphere Energy
Assuming the 90 days horizon Bausch Health is expected to generate 2.54 times less return on investment than Hemisphere Energy. In addition to that, Bausch Health is 2.16 times more volatile than Hemisphere Energy Corp. It trades about 0.02 of its total potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.09 per unit of volatility. If you would invest 112.00 in Hemisphere Energy Corp on September 19, 2024 and sell it today you would earn a total of 9.00 from holding Hemisphere Energy Corp or generate 8.04% 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. Hemisphere Energy Corp
Performance |
| Timeline |
| Bausch Health Companies |
| Hemisphere Energy Corp |
Bausch Health and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Hemisphere Energy
The main advantage of trading using opposite Bausch Health and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| Bausch Health vs. Shionogi Co | Bausch Health vs. Dr Reddys Laboratories | Bausch Health vs. Superior Plus Corp | Bausch Health vs. NMI Holdings |
| Hemisphere Energy vs. WisdomTree Investments | Hemisphere Energy vs. Food Life Companies | Hemisphere Energy vs. Astral Foods Limited | Hemisphere Energy vs. HK Electric Investments |
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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