Correlation Between CVW CleanTech and Bausch Health
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Bausch Health Companies, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Bausch Health.
Diversification Opportunities for CVW CleanTech and Bausch Health
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVW and Bausch is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and Bausch Health go up and down completely randomly.
Pair Corralation between CVW CleanTech and Bausch Health
Assuming the 90 days horizon CVW CleanTech is expected to generate 0.53 times more return on investment than Bausch Health. However, CVW CleanTech is 1.88 times less risky than Bausch Health. It trades about 0.04 of its potential returns per unit of risk. Bausch Health Companies is currently generating about -0.01 per unit of risk. If you would invest 85.00 in CVW CleanTech on August 27, 2024 and sell it today you would earn a total of 1.00 from holding CVW CleanTech or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Bausch Health Companies
Performance |
| Timeline |
| CVW CleanTech |
| Bausch Health Companies |
CVW CleanTech and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Bausch Health
The main advantage of trading using opposite CVW CleanTech and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.| CVW CleanTech vs. First Majestic Silver | CVW CleanTech vs. Ivanhoe Energy | CVW CleanTech vs. Orezone Gold Corp | CVW CleanTech vs. Faraday Copper Corp |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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