Correlation Between ATT and Bausch
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By analyzing existing cross correlation between ATT Inc and Bausch Health Companies, you can compare the effects of market volatilities on ATT and Bausch 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 ATT with a short position of Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Bausch.
Diversification Opportunities for ATT and Bausch
Poor diversification
The 3 months correlation between ATT and Bausch is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc 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 ATT 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 ATT Inc are associated (or correlated) with Bausch. 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 ATT i.e., ATT and Bausch go up and down completely randomly.
Pair Corralation between ATT and Bausch
Taking into account the 90-day investment horizon ATT is expected to generate 2.06 times less return on investment than Bausch. But when comparing it to its historical volatility, ATT Inc is 2.86 times less risky than Bausch. It trades about 0.2 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,200 in Bausch Health Companies on September 12, 2024 and sell it today you would earn a total of 1,500 from holding Bausch Health Companies or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.2% |
| Values | Daily Returns |
ATT Inc vs. Bausch Health Companies
Performance |
| Timeline |
| ATT Inc |
| Bausch Health Companies |
ATT and Bausch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Bausch
The main advantage of trading using opposite ATT and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Bausch 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 will offset losses from the drop in Bausch's long position.| ATT vs. Victory Integrity Smallmid Cap | ATT vs. Hilton Worldwide Holdings | ATT vs. NVIDIA | ATT vs. JPMorgan Chase Co |
| Bausch vs. Acco Brands | Bausch vs. John Wiley Sons | Bausch vs. Universal Technical Institute | Bausch vs. Delek Logistics Partners |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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