Correlation Between NioCorp Developments and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Bausch Lomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Bausch Lomb Corp, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Bausch Lomb.
Diversification Opportunities for NioCorp Developments and Bausch Lomb
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NioCorp and Bausch is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd 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 NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Bausch Lomb go up and down completely randomly.
Pair Corralation between NioCorp Developments and Bausch Lomb
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Bausch Lomb. In addition to that, NioCorp Developments is 2.08 times more volatile than Bausch Lomb Corp. It trades about -0.04 of its total potential returns per unit of risk. Bausch Lomb Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,588 in Bausch Lomb Corp on September 3, 2024 and sell it today you would earn a total of 394.00 from holding Bausch Lomb Corp or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Bausch Lomb Corp
Performance |
| Timeline |
| NioCorp Developments |
| Bausch Lomb Corp |
NioCorp Developments and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Bausch Lomb
The main advantage of trading using opposite NioCorp Developments and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Summit Materials | NioCorp Developments vs. Westrock Coffee | NioCorp Developments vs. Aldel Financial II | NioCorp Developments vs. Keurig Dr Pepper |
| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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