Correlation Between Forte Biosciences and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Forte Biosciences 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 Forte Biosciences and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forte Biosciences and Bausch Health Companies, you can compare the effects of market volatilities on Forte Biosciences 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 Forte Biosciences with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forte Biosciences and Bausch Health.
Diversification Opportunities for Forte Biosciences and Bausch Health
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forte and Bausch is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Forte Biosciences 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 Forte Biosciences 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 Forte Biosciences 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 Forte Biosciences i.e., Forte Biosciences and Bausch Health go up and down completely randomly.
Pair Corralation between Forte Biosciences and Bausch Health
Given the investment horizon of 90 days Forte Biosciences is expected to generate 5.28 times more return on investment than Bausch Health. However, Forte Biosciences is 5.28 times more volatile than Bausch Health Companies. It trades about 0.14 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.17 per unit of risk. If you would invest 790.00 in Forte Biosciences on August 30, 2024 and sell it today you would earn a total of 1,189 from holding Forte Biosciences or generate 150.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forte Biosciences vs. Bausch Health Companies
Performance |
| Timeline |
| Forte Biosciences |
| Bausch Health Companies |
Forte Biosciences and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forte Biosciences and Bausch Health
The main advantage of trading using opposite Forte Biosciences and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forte Biosciences 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.| Forte Biosciences vs. Indaptus Therapeutics | Forte Biosciences vs. Rezolute | Forte Biosciences vs. Tempest Therapeutics | Forte Biosciences vs. ABVC Biopharma |
| Bausch Health vs. Emergent Biosolutions | Bausch Health vs. Neurocrine Biosciences | Bausch Health vs. Teva Pharma Industries | Bausch Health vs. Haleon plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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