Correlation Between Deciphera Pharmaceuticals and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deciphera Pharmaceuticals LLC and Bausch Health Companies, you can compare the effects of market volatilities on Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deciphera Pharmaceuticals and Bausch Health.
Diversification Opportunities for Deciphera Pharmaceuticals and Bausch Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deciphera and Bausch is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Deciphera Pharmaceuticals LLC 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 Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals LLC 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 Deciphera Pharmaceuticals i.e., Deciphera Pharmaceuticals and Bausch Health go up and down completely randomly.
Pair Corralation between Deciphera Pharmaceuticals and Bausch Health
Given the investment horizon of 90 days Deciphera Pharmaceuticals LLC is expected to under-perform the Bausch Health. But the stock apears to be less risky and, when comparing its historical volatility, Deciphera Pharmaceuticals LLC is 1.05 times less risky than Bausch Health. The stock trades about -0.02 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 786.00 in Bausch Health Companies on September 4, 2024 and sell it today you would lose (4.00) from holding Bausch Health Companies or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
Deciphera Pharmaceuticals LLC vs. Bausch Health Companies
Performance |
| Timeline |
| Deciphera Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bausch Health Companies |
Deciphera Pharmaceuticals and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deciphera Pharmaceuticals and Bausch Health
The main advantage of trading using opposite Deciphera Pharmaceuticals and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deciphera Pharmaceuticals 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.| Deciphera Pharmaceuticals vs. ANI Pharmaceuticals | Deciphera Pharmaceuticals vs. Phibro Animal Health | Deciphera Pharmaceuticals vs. Prestige Brand Holdings | Deciphera Pharmaceuticals vs. Evotec SE ADR |
| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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