Correlation Between Verrica Pharmaceuticals and Bausch Health
Can any of the company-specific risk be diversified away by investing in both Verrica Pharmaceuticals 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 Verrica Pharmaceuticals and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verrica Pharmaceuticals and Bausch Health Companies, you can compare the effects of market volatilities on Verrica Pharmaceuticals 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 Verrica Pharmaceuticals with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verrica Pharmaceuticals and Bausch Health.
Diversification Opportunities for Verrica Pharmaceuticals and Bausch Health
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Verrica and Bausch is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Verrica Pharmaceuticals 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 Verrica Pharmaceuticals 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 Verrica Pharmaceuticals 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 Verrica Pharmaceuticals i.e., Verrica Pharmaceuticals and Bausch Health go up and down completely randomly.
Pair Corralation between Verrica Pharmaceuticals and Bausch Health
Given the investment horizon of 90 days Verrica Pharmaceuticals is expected to under-perform the Bausch Health. In addition to that, Verrica Pharmaceuticals is 2.22 times more volatile than Bausch Health Companies. It trades about -0.08 of its total potential returns per unit of risk. Bausch Health Companies is currently generating about -0.01 per unit of volatility. If you would invest 939.00 in Bausch Health Companies on August 27, 2024 and sell it today you would lose (142.00) from holding Bausch Health Companies or give up 15.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verrica Pharmaceuticals vs. Bausch Health Companies
Performance |
| Timeline |
| Verrica Pharmaceuticals |
| Bausch Health Companies |
Verrica Pharmaceuticals and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verrica Pharmaceuticals and Bausch Health
The main advantage of trading using opposite Verrica Pharmaceuticals and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verrica Pharmaceuticals 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.| Verrica Pharmaceuticals vs. Inventiva Sa | Verrica Pharmaceuticals vs. Edgewise Therapeutics | Verrica Pharmaceuticals vs. Vigil Neuroscience | Verrica Pharmaceuticals vs. Connect Biopharma Holdings |
| Bausch Health vs. Capricor Therapeutics | Bausch Health vs. Soleno Therapeutics | Bausch Health vs. Bio Path Holdings | Bausch Health vs. Moleculin Biotech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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