Correlation Between Pembina Pipeline and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and Bausch Health Companies, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Bausch Health.
Diversification Opportunities for Pembina Pipeline and Bausch Health
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pembina and Bausch is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline i.e., Pembina Pipeline and Bausch Health go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Bausch Health
Assuming the 90 days trading horizon Pembina Pipeline is expected to generate 3.64 times less return on investment than Bausch Health. But when comparing it to its historical volatility, Pembina Pipeline Corp is 4.03 times less risky than Bausch Health. It trades about 0.06 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 862.00 in Bausch Health Companies on November 28, 2024 and sell it today you would earn a total of 217.00 from holding Bausch Health Companies or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Bausch Health Companies
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Bausch Health Companies |
Pembina Pipeline and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Bausch Health
The main advantage of trading using opposite Pembina Pipeline and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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.| Pembina Pipeline vs. Bausch Health Companies | Pembina Pipeline vs. Andlauer Healthcare Gr | Pembina Pipeline vs. NorthWest Healthcare Properties | Pembina Pipeline vs. Reliq Health Technologies |
| Bausch Health vs. Gildan Activewear | Bausch Health vs. Open Text Corp | Bausch Health vs. Waste Connections | Bausch Health vs. CCL Industries |
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.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |