Correlation Between Bausch and Arm Holdings
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By analyzing existing cross correlation between Bausch Health Companies and Arm Holdings plc, you can compare the effects of market volatilities on Bausch and Arm Holdings 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 Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch and Arm Holdings.
Diversification Opportunities for Bausch and Arm Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bausch and Arm is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc 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 Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Bausch i.e., Bausch and Arm Holdings go up and down completely randomly.
Pair Corralation between Bausch and Arm Holdings
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Arm Holdings. In addition to that, Bausch is 1.27 times more volatile than Arm Holdings plc. It trades about -0.03 of its total potential returns per unit of risk. Arm Holdings plc is currently generating about 0.09 per unit of volatility. If you would invest 11,045 in Arm Holdings plc on November 3, 2024 and sell it today you would earn a total of 4,910 from holding Arm Holdings plc or generate 44.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.8% |
| Values | Daily Returns |
Bausch Health Companies vs. Arm Holdings plc
Performance |
| Timeline |
| Bausch Health Companies |
| Arm Holdings plc |
Bausch and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch and Arm Holdings
The main advantage of trading using opposite Bausch and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Bausch vs. Spyre Therapeutics | Bausch vs. Alvotech | Bausch vs. Aperture Health | Bausch vs. Village Super Market |
| Arm Holdings vs. BioNTech SE | Arm Holdings vs. Kuya Silver | Arm Holdings vs. Nicola Mining | Arm Holdings vs. Tarsus Pharmaceuticals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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