Correlation Between Procaps Group and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Procaps Group 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 Procaps Group and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procaps Group SA and Bausch Health Companies, you can compare the effects of market volatilities on Procaps Group 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 Procaps Group with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procaps Group and Bausch Health.
Diversification Opportunities for Procaps Group and Bausch Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procaps and Bausch is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA 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 Procaps Group 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 Procaps Group SA 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 Procaps Group i.e., Procaps Group and Bausch Health go up and down completely randomly.
Pair Corralation between Procaps Group and Bausch Health
Given the investment horizon of 90 days Procaps Group SA is expected to under-perform the Bausch Health. In addition to that, Procaps Group is 2.12 times more volatile than Bausch Health Companies. It trades about -0.01 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about 0.02 per unit of volatility. If you would invest 765.00 in Bausch Health Companies on September 2, 2024 and sell it today you would earn a total of 72.00 from holding Bausch Health Companies or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procaps Group SA vs. Bausch Health Companies
Performance |
| Timeline |
| Procaps Group SA |
| Bausch Health Companies |
Procaps Group and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procaps Group and Bausch Health
The main advantage of trading using opposite Procaps Group and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procaps Group 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.| Procaps Group vs. Tff Pharmaceuticals | Procaps Group vs. Eliem Therapeutics | Procaps Group vs. Inhibrx | Procaps Group vs. Enliven Therapeutics |
| Bausch Health vs. Crinetics Pharmaceuticals | Bausch Health vs. Enanta Pharmaceuticals | Bausch Health vs. Amicus Therapeutics | Bausch Health vs. Connect Biopharma Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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