Correlation Between Bausch Health and MINING PROJECTS
Can any of the company-specific risk be diversified away by investing in both Bausch Health and MINING PROJECTS 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 MINING PROJECTS 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 MINING PROJECTS GRP, you can compare the effects of market volatilities on Bausch Health and MINING PROJECTS 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 MINING PROJECTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and MINING PROJECTS.
Diversification Opportunities for Bausch Health and MINING PROJECTS
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bausch and MINING is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and MINING PROJECTS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINING PROJECTS GRP 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 MINING PROJECTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINING PROJECTS GRP has no effect on the direction of Bausch Health i.e., Bausch Health and MINING PROJECTS go up and down completely randomly.
Pair Corralation between Bausch Health and MINING PROJECTS
Assuming the 90 days horizon Bausch Health Companies is expected to generate 0.83 times more return on investment than MINING PROJECTS. However, Bausch Health Companies is 1.21 times less risky than MINING PROJECTS. It trades about 0.05 of its potential returns per unit of risk. MINING PROJECTS GRP is currently generating about -0.04 per unit of risk. If you would invest 745.00 in Bausch Health Companies on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Bausch Health Companies or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. MINING PROJECTS GRP
Performance |
| Timeline |
| Bausch Health Companies |
| MINING PROJECTS GRP |
Bausch Health and MINING PROJECTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and MINING PROJECTS
The main advantage of trading using opposite Bausch Health and MINING PROJECTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, MINING PROJECTS 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 MINING PROJECTS will offset losses from the drop in MINING PROJECTS's long position.| Bausch Health vs. Eisai Co | Bausch Health vs. Shionogi Co | Bausch Health vs. Superior Plus Corp | Bausch Health vs. Origin Agritech |
| MINING PROJECTS vs. Sunstone Hotel Investors | MINING PROJECTS vs. MIRAMAR HOTEL INV | MINING PROJECTS vs. Bausch Health Companies | MINING PROJECTS vs. Playa Hotels Resorts |
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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