Correlation Between Brent Crude and Bausch
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By analyzing existing cross correlation between Brent Crude Oil and Bausch Health Companies, you can compare the effects of market volatilities on Brent Crude and Bausch 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 Brent Crude with a short position of Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brent Crude and Bausch.
Diversification Opportunities for Brent Crude and Bausch
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brent and Bausch is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Brent Crude Oil 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 Brent Crude 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 Brent Crude Oil are associated (or correlated) with Bausch. 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 Brent Crude i.e., Brent Crude and Bausch go up and down completely randomly.
Pair Corralation between Brent Crude and Bausch
Assuming the 90 days horizon Brent Crude Oil is expected to generate 1.72 times more return on investment than Bausch. However, Brent Crude is 1.72 times more volatile than Bausch Health Companies. It trades about 0.02 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 7,375 in Brent Crude Oil on November 2, 2024 and sell it today you would earn a total of 214.00 from holding Brent Crude Oil or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.65% |
| Values | Daily Returns |
Brent Crude Oil vs. Bausch Health Companies
Performance |
| Timeline |
| Brent Crude Oil |
| Bausch Health Companies |
Brent Crude and Bausch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brent Crude and Bausch
The main advantage of trading using opposite Brent Crude and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brent Crude position performs unexpectedly, Bausch 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 will offset losses from the drop in Bausch's long position.| Brent Crude vs. Natural Gas | Brent Crude vs. Lean Hogs Futures | Brent Crude vs. Live Cattle Futures | Brent Crude vs. Lumber Futures |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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