Correlation Between PROCTER GAMBLE and Bausch Health
Can any of the company-specific risk be diversified away by investing in both PROCTER GAMBLE 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 PROCTER GAMBLE and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROCTER GAMBLE CDR and Bausch Health Companies, you can compare the effects of market volatilities on PROCTER GAMBLE 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 PROCTER GAMBLE with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROCTER GAMBLE and Bausch Health.
Diversification Opportunities for PROCTER GAMBLE and Bausch Health
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PROCTER and Bausch is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PROCTER GAMBLE CDR 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 PROCTER GAMBLE 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 PROCTER GAMBLE CDR 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 PROCTER GAMBLE i.e., PROCTER GAMBLE and Bausch Health go up and down completely randomly.
Pair Corralation between PROCTER GAMBLE and Bausch Health
Assuming the 90 days trading horizon PROCTER GAMBLE is expected to generate 3.18 times less return on investment than Bausch Health. But when comparing it to its historical volatility, PROCTER GAMBLE CDR is 3.53 times less risky than Bausch Health. It trades about 0.03 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 857.00 in Bausch Health Companies on September 13, 2024 and sell it today you would earn a total of 216.00 from holding Bausch Health Companies or generate 25.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROCTER GAMBLE CDR vs. Bausch Health Companies
Performance |
| Timeline |
| PROCTER GAMBLE CDR |
| Bausch Health Companies |
PROCTER GAMBLE and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROCTER GAMBLE and Bausch Health
The main advantage of trading using opposite PROCTER GAMBLE and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROCTER GAMBLE 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.| PROCTER GAMBLE vs. Enduro Metals Corp | PROCTER GAMBLE vs. Contagious Gaming | PROCTER GAMBLE vs. A W FOOD | PROCTER GAMBLE vs. Tree Island Steel |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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