Correlation Between South American and Bausch Health
Can any of the company-specific risk be diversified away by investing in both South American 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 South American and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South American Gold and Bausch Health Companies, you can compare the effects of market volatilities on South American 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 South American with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of South American and Bausch Health.
Diversification Opportunities for South American and Bausch Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between South and Bausch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding South American Gold 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 South American 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 South American Gold 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 South American i.e., South American and Bausch Health go up and down completely randomly.
Pair Corralation between South American and Bausch Health
Given the investment horizon of 90 days South American Gold is expected to generate 41.62 times more return on investment than Bausch Health. However, South American is 41.62 times more volatile than Bausch Health Companies. It trades about 0.11 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 0.01 in South American Gold on September 3, 2024 and sell it today you would lose (0.01) from holding South American Gold or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South American Gold vs. Bausch Health Companies
Performance |
| Timeline |
| South American Gold |
| Bausch Health Companies |
South American and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South American and Bausch Health
The main advantage of trading using opposite South American and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South American 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.| South American vs. Pacira BioSciences, | South American vs. Collegium Pharmaceutical | South American vs. Prestige Brand Holdings | South American vs. Phibro Animal Health |
| Bausch Health vs. Viatris | Bausch Health vs. Catalent | Bausch Health vs. Tilray Inc | Bausch Health vs. Zoetis 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |