Correlation Between CDL INVESTMENT and Bausch Health
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Bausch Health 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 CDL INVESTMENT and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Bausch Health Companies, you can compare the effects of market volatilities on CDL INVESTMENT and Bausch Health 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 CDL INVESTMENT with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Bausch Health.
Diversification Opportunities for CDL INVESTMENT and Bausch Health
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDL and Bausch is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Bausch Health go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Bausch Health
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.4 times more return on investment than Bausch Health. However, CDL INVESTMENT is 2.5 times less risky than Bausch Health. It trades about 0.09 of its potential returns per unit of risk. Bausch Health Companies is currently generating about -0.09 per unit of risk. If you would invest 43.00 in CDL INVESTMENT on September 24, 2024 and sell it today you would earn a total of 1.00 from holding CDL INVESTMENT or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Bausch Health Companies
Performance |
| Timeline |
| CDL INVESTMENT |
| Bausch Health Companies |
CDL INVESTMENT and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Bausch Health
The main advantage of trading using opposite CDL INVESTMENT and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Bausch Health 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 Bausch Health will offset losses from the drop in Bausch Health's long position.| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Microsoft |
| Bausch Health vs. New Residential Investment | Bausch Health vs. PROSIEBENSAT1 MEDIADR4 | Bausch Health vs. Seven West Media | Bausch Health vs. CDL INVESTMENT |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |