Correlation Between FG Acquisition and Bausch Health
Can any of the company-specific risk be diversified away by investing in both FG Acquisition 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 FG Acquisition and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Acquisition Corp and Bausch Health Companies, you can compare the effects of market volatilities on FG Acquisition 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 FG Acquisition with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Acquisition and Bausch Health.
Diversification Opportunities for FG Acquisition and Bausch Health
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FGAA-U and Bausch is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding FG Acquisition Corp 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 FG Acquisition 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 FG Acquisition Corp 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 FG Acquisition i.e., FG Acquisition and Bausch Health go up and down completely randomly.
Pair Corralation between FG Acquisition and Bausch Health
If you would invest 1,178 in FG Acquisition Corp on September 4, 2024 and sell it today you would earn a total of 0.00 from holding FG Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
FG Acquisition Corp vs. Bausch Health Companies
Performance |
| Timeline |
| FG Acquisition Corp |
| Bausch Health Companies |
FG Acquisition and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Acquisition and Bausch Health
The main advantage of trading using opposite FG Acquisition and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Acquisition 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.| FG Acquisition vs. iShares Canadian HYBrid | FG Acquisition vs. Altagas Cum Red | FG Acquisition vs. European Residential Real | FG Acquisition vs. iShares Fundamental Hedged |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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