Correlation Between Bausch Health and UPDATE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Bausch Health and UPDATE SOFTWARE 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 UPDATE SOFTWARE 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 UPDATE SOFTWARE, you can compare the effects of market volatilities on Bausch Health and UPDATE SOFTWARE 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 UPDATE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and UPDATE SOFTWARE.
Diversification Opportunities for Bausch Health and UPDATE SOFTWARE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and UPDATE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and UPDATE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPDATE SOFTWARE 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 UPDATE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPDATE SOFTWARE has no effect on the direction of Bausch Health i.e., Bausch Health and UPDATE SOFTWARE go up and down completely randomly.
Pair Corralation between Bausch Health and UPDATE SOFTWARE
Assuming the 90 days horizon Bausch Health is expected to generate 7.4 times less return on investment than UPDATE SOFTWARE. In addition to that, Bausch Health is 1.08 times more volatile than UPDATE SOFTWARE. It trades about 0.05 of its total potential returns per unit of risk. UPDATE SOFTWARE is currently generating about 0.37 per unit of volatility. If you would invest 1,242 in UPDATE SOFTWARE on September 1, 2024 and sell it today you would earn a total of 360.00 from holding UPDATE SOFTWARE or generate 28.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. UPDATE SOFTWARE
Performance |
| Timeline |
| Bausch Health Companies |
| UPDATE SOFTWARE |
Bausch Health and UPDATE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and UPDATE SOFTWARE
The main advantage of trading using opposite Bausch Health and UPDATE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, UPDATE SOFTWARE 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 UPDATE SOFTWARE will offset losses from the drop in UPDATE SOFTWARE's long position.| Bausch Health vs. Eisai Co | Bausch Health vs. Shionogi Co | Bausch Health vs. Superior Plus Corp | Bausch Health vs. Origin Agritech |
| UPDATE SOFTWARE vs. Uber Technologies | UPDATE SOFTWARE vs. ORMAT TECHNOLOGIES | UPDATE SOFTWARE vs. MeVis Medical Solutions | UPDATE SOFTWARE vs. Merit Medical Systems |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |