Correlation Between Pulse Seismic and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Pulse Seismic 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 Pulse Seismic and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pulse Seismic and Bausch Health Companies, you can compare the effects of market volatilities on Pulse Seismic 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 Pulse Seismic with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pulse Seismic and Bausch Health.
Diversification Opportunities for Pulse Seismic and Bausch Health
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pulse and Bausch is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pulse Seismic 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 Pulse Seismic 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 Pulse Seismic 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 Pulse Seismic i.e., Pulse Seismic and Bausch Health go up and down completely randomly.
Pair Corralation between Pulse Seismic and Bausch Health
Assuming the 90 days trading horizon Pulse Seismic is expected to generate 0.86 times more return on investment than Bausch Health. However, Pulse Seismic is 1.17 times less risky than Bausch Health. It trades about 0.05 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.02 per unit of risk. If you would invest 137.00 in Pulse Seismic on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Pulse Seismic or generate 70.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pulse Seismic vs. Bausch Health Companies
Performance |
| Timeline |
| Pulse Seismic |
| Bausch Health Companies |
Pulse Seismic and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pulse Seismic and Bausch Health
The main advantage of trading using opposite Pulse Seismic and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pulse Seismic 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.The idea behind Pulse Seismic and Bausch Health Companies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bausch Health vs. Westaim Corp | Bausch Health vs. Pulse Seismic | Bausch Health vs. Quarterhill | Bausch Health vs. TECSYS Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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