Correlation Between Trade Desk and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Trade Desk 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 Trade Desk and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Trade Desk and Bausch Health Companies, you can compare the effects of market volatilities on Trade Desk 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 Trade Desk with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Bausch Health.
Diversification Opportunities for Trade Desk and Bausch Health
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trade and Bausch is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk 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 Trade Desk 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 The Trade Desk 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 Trade Desk i.e., Trade Desk and Bausch Health go up and down completely randomly.
Pair Corralation between Trade Desk and Bausch Health
Assuming the 90 days trading horizon The Trade Desk is expected to under-perform the Bausch Health. But the stock apears to be less risky and, when comparing its historical volatility, The Trade Desk is 1.38 times less risky than Bausch Health. The stock trades about -0.17 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Bausch Health Companies on November 3, 2024 and sell it today you would lose (10.00) from holding Bausch Health Companies or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. Bausch Health Companies
Performance |
| Timeline |
| Trade Desk |
| Bausch Health Companies |
Trade Desk and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and Bausch Health
The main advantage of trading using opposite Trade Desk and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk 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.| Trade Desk vs. BRIT AMER TOBACCO | Trade Desk vs. Westinghouse Air Brake | Trade Desk vs. LAir Liquide SA | Trade Desk vs. GAMES OPERATORS SA |
| Bausch Health vs. Scientific Games | Bausch Health vs. Perdoceo Education | Bausch Health vs. TAL Education Group | Bausch Health vs. OURGAME INTHOLDL 00005 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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