Correlation Between Shuttle Pharmaceuticals and Bausch Health

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Can any of the company-specific risk be diversified away by investing in both Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shuttle Pharmaceuticals and Bausch Health Companies, you can compare the effects of market volatilities on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuttle Pharmaceuticals and Bausch Health.

Diversification Opportunities for Shuttle Pharmaceuticals and Bausch Health

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Shuttle and Bausch is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals i.e., Shuttle Pharmaceuticals and Bausch Health go up and down completely randomly.

Pair Corralation between Shuttle Pharmaceuticals and Bausch Health

Given the investment horizon of 90 days Shuttle Pharmaceuticals is expected to under-perform the Bausch Health. In addition to that, Shuttle Pharmaceuticals is 2.48 times more volatile than Bausch Health Companies. It trades about -0.17 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about -0.03 per unit of volatility. If you would invest  819.00  in Bausch Health Companies on August 29, 2024 and sell it today you would lose (30.00) from holding Bausch Health Companies or give up 3.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Shuttle Pharmaceuticals  vs.  Bausch Health Companies

 Performance 
       Timeline  
Shuttle Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shuttle Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Bausch Health Companies 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bausch Health Companies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, Bausch Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shuttle Pharmaceuticals and Bausch Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shuttle Pharmaceuticals and Bausch Health

The main advantage of trading using opposite Shuttle Pharmaceuticals and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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