Correlation Between Marine Products and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both Marine Products and Bausch Lomb 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 Marine Products and Bausch Lomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Bausch Lomb Corp, you can compare the effects of market volatilities on Marine Products and Bausch Lomb 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 Marine Products with a short position of Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Bausch Lomb.
Diversification Opportunities for Marine Products and Bausch Lomb
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marine and Bausch is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp and Marine Products 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 Marine Products are associated (or correlated) with Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Marine Products i.e., Marine Products and Bausch Lomb go up and down completely randomly.
Pair Corralation between Marine Products and Bausch Lomb
Considering the 90-day investment horizon Marine Products is expected to under-perform the Bausch Lomb. In addition to that, Marine Products is 1.14 times more volatile than Bausch Lomb Corp. It trades about -0.03 of its total potential returns per unit of risk. Bausch Lomb Corp is currently generating about 0.02 per unit of volatility. If you would invest 1,851 in Bausch Lomb Corp on August 31, 2024 and sell it today you would earn a total of 131.00 from holding Bausch Lomb Corp or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Bausch Lomb Corp
Performance |
| Timeline |
| Marine Products |
| Bausch Lomb Corp |
Marine Products and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Bausch Lomb
The main advantage of trading using opposite Marine Products and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Bausch Lomb 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 Lomb will offset losses from the drop in Bausch Lomb's long position.| Marine Products vs. Vision Marine Technologies | Marine Products vs. EZGO Technologies | Marine Products vs. LCI Industries | Marine Products vs. Curtiss Motorcycles |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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