Correlation Between Bausch and Sensient Technologies
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By analyzing existing cross correlation between Bausch Health Companies and Sensient Technologies, you can compare the effects of market volatilities on Bausch and Sensient Technologies 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 Bausch with a short position of Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch and Sensient Technologies.
Diversification Opportunities for Bausch and Sensient Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Sensient is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies and Bausch 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 Bausch Health Companies are associated (or correlated) with Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of Bausch i.e., Bausch and Sensient Technologies go up and down completely randomly.
Pair Corralation between Bausch and Sensient Technologies
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Sensient Technologies. In addition to that, Bausch is 2.27 times more volatile than Sensient Technologies. It trades about -0.26 of its total potential returns per unit of risk. Sensient Technologies is currently generating about -0.19 per unit of volatility. If you would invest 8,039 in Sensient Technologies on September 12, 2024 and sell it today you would lose (375.00) from holding Sensient Technologies or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Sensient Technologies
Performance |
| Timeline |
| Bausch Health Companies |
| Sensient Technologies |
Bausch and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch and Sensient Technologies
The main advantage of trading using opposite Bausch and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch position performs unexpectedly, Sensient Technologies 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.| Bausch vs. Hudson Pacific Properties | Bausch vs. Teradyne | Bausch vs. Bassett Furniture Industries | Bausch vs. Live Ventures |
| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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