Correlation Between SIGA Technologies and Bausch Health
Can any of the company-specific risk be diversified away by investing in both SIGA Technologies 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 SIGA Technologies and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIGA Technologies and Bausch Health Companies, you can compare the effects of market volatilities on SIGA Technologies 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 SIGA Technologies with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIGA Technologies and Bausch Health.
Diversification Opportunities for SIGA Technologies and Bausch Health
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIGA and Bausch is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies i.e., SIGA Technologies and Bausch Health go up and down completely randomly.
Pair Corralation between SIGA Technologies and Bausch Health
Given the investment horizon of 90 days SIGA Technologies is expected to generate 2.41 times less return on investment than Bausch Health. In addition to that, SIGA Technologies is 1.52 times more volatile than Bausch Health Companies. It trades about 0.02 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about 0.09 per unit of volatility. If you would invest 620.00 in Bausch Health Companies on September 2, 2024 and sell it today you would earn a total of 217.00 from holding Bausch Health Companies or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIGA Technologies vs. Bausch Health Companies
Performance |
| Timeline |
| SIGA Technologies |
| Bausch Health Companies |
SIGA Technologies and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIGA Technologies and Bausch Health
The main advantage of trading using opposite SIGA Technologies and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGA Technologies 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.| SIGA Technologies vs. Crinetics Pharmaceuticals | SIGA Technologies vs. Enanta Pharmaceuticals | SIGA Technologies vs. Amicus Therapeutics | SIGA Technologies vs. Connect Biopharma Holdings |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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