Correlation Between Plains GP and Bausch
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By analyzing existing cross correlation between Plains GP Holdings and Bausch Health Companies, you can compare the effects of market volatilities on Plains GP and Bausch 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 Plains GP with a short position of Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plains GP and Bausch.
Diversification Opportunities for Plains GP and Bausch
Excellent diversification
The 3 months correlation between Plains and Bausch is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Plains GP Holdings 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 Plains GP 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 Plains GP Holdings are associated (or correlated) with Bausch. 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 Plains GP i.e., Plains GP and Bausch go up and down completely randomly.
Pair Corralation between Plains GP and Bausch
Given the investment horizon of 90 days Plains GP Holdings is expected to generate 0.88 times more return on investment than Bausch. However, Plains GP Holdings is 1.13 times less risky than Bausch. It trades about 0.49 of its potential returns per unit of risk. Bausch Health Companies is currently generating about -0.24 per unit of risk. If you would invest 1,808 in Plains GP Holdings on October 20, 2024 and sell it today you would earn a total of 335.00 from holding Plains GP Holdings or generate 18.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Plains GP Holdings vs. Bausch Health Companies
Performance |
| Timeline |
| Plains GP Holdings |
| Bausch Health Companies |
Plains GP and Bausch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plains GP and Bausch
The main advantage of trading using opposite Plains GP and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plains GP position performs unexpectedly, Bausch 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 will offset losses from the drop in Bausch's long position.| Plains GP vs. Targa Resources | Plains GP vs. Western Midstream Partners | Plains GP vs. MPLX LP | Plains GP vs. Plains All American |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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