Correlation Between Bausch Health and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Talanx AG 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 Talanx AG 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 Talanx AG, you can compare the effects of market volatilities on Bausch Health and Talanx AG 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Talanx AG.
Diversification Opportunities for Bausch Health and Talanx AG
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Talanx is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Bausch Health i.e., Bausch Health and Talanx AG go up and down completely randomly.
Pair Corralation between Bausch Health and Talanx AG
Assuming the 90 days horizon Bausch Health Companies is expected to under-perform the Talanx AG. In addition to that, Bausch Health is 3.38 times more volatile than Talanx AG. It trades about -0.04 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.16 per unit of volatility. If you would invest 8,170 in Talanx AG on November 27, 2024 and sell it today you would earn a total of 305.00 from holding Talanx AG or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bausch Health Companies vs. Talanx AG
Performance |
| Timeline |
| Bausch Health Companies |
| Talanx AG |
Bausch Health and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Talanx AG
The main advantage of trading using opposite Bausch Health and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| Bausch Health vs. FIREWEED METALS P | Bausch Health vs. Ross Stores | Bausch Health vs. MCEWEN MINING INC | Bausch Health vs. Retail Estates NV |
| Talanx AG vs. WESANA HEALTH HOLD | Talanx AG vs. US Foods Holding | Talanx AG vs. COMM HEALTH SYSTEMS | Talanx AG vs. Moneysupermarket Group PLC |
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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