Correlation Between Bausch Health and Rmy Cointreau
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Rmy Cointreau 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 Rmy Cointreau 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 Rmy Cointreau SA, you can compare the effects of market volatilities on Bausch Health and Rmy Cointreau 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 Rmy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Rmy Cointreau.
Diversification Opportunities for Bausch Health and Rmy Cointreau
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bausch and Rmy is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rmy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Bausch Health i.e., Bausch Health and Rmy Cointreau go up and down completely randomly.
Pair Corralation between Bausch Health and Rmy Cointreau
Assuming the 90 days horizon Bausch Health Companies is expected to under-perform the Rmy Cointreau. In addition to that, Bausch Health is 1.3 times more volatile than Rmy Cointreau SA. It trades about -0.1 of its total potential returns per unit of risk. Rmy Cointreau SA is currently generating about 0.39 per unit of volatility. If you would invest 5,360 in Rmy Cointreau SA on September 14, 2024 and sell it today you would earn a total of 990.00 from holding Rmy Cointreau SA or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Rmy Cointreau SA
Performance |
| Timeline |
| Bausch Health Companies |
| Rmy Cointreau SA |
Bausch Health and Rmy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Rmy Cointreau
The main advantage of trading using opposite Bausch Health and Rmy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Rmy Cointreau 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 Rmy Cointreau will offset losses from the drop in Rmy Cointreau'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 |
| Rmy Cointreau vs. HEALTHCARE REAL A | Rmy Cointreau vs. EEDUCATION ALBERT AB | Rmy Cointreau vs. Bausch Health Companies | Rmy Cointreau vs. Grand Canyon Education |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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