Correlation Between Champion Iron and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Bausch Health Companies, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Bausch Health.
Diversification Opportunities for Champion Iron and Bausch Health
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Champion and Bausch is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron 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 Champion Iron 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 Champion Iron 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 Champion Iron i.e., Champion Iron and Bausch Health go up and down completely randomly.
Pair Corralation between Champion Iron and Bausch Health
Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Bausch Health. But the stock apears to be less risky and, when comparing its historical volatility, Champion Iron is 1.4 times less risky than Bausch Health. The stock trades about -0.12 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,139 in Bausch Health Companies on August 27, 2024 and sell it today you would lose (26.00) from holding Bausch Health Companies or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Bausch Health Companies
Performance |
| Timeline |
| Champion Iron |
| Bausch Health Companies |
Champion Iron and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Bausch Health
The main advantage of trading using opposite Champion Iron and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.| Champion Iron vs. Black Iron | Champion Iron vs. Wesdome Gold Mines | Champion Iron vs. GoGold Resources | Champion Iron vs. Mason Graphite |
| Bausch Health vs. Auxly Cannabis Group | Bausch Health vs. Entourage Health Corp | Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Altagas Cum Red |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |