Correlation Between Bausch Health and Dividend

Can any of the company-specific risk be diversified away by investing in both Bausch Health and Dividend 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 Bausch Health and Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bausch Health Companies and Dividend 15 Split, you can compare the effects of market volatilities on Bausch Health and Dividend 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 Health with a short position of Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Dividend.

Diversification Opportunities for Bausch Health and Dividend

-0.47

Correlation Coefficient

Bausch Health  Dividend

Very good diversification

The 3 months correlation between Bausch and Dividend is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split and Bausch Health 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Bausch Health i.e., Bausch Health and Dividend go up and down completely randomly.

Pair Corralation between Bausch Health and Dividend

Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Dividend. In addition to that, Bausch Health is 5.72 times more volatile than Dividend 15 Split. It trades about -0.01 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about 0.07 per unit of volatility. If you would invest  1,068  in Dividend 15 Split on December 23, 2024 and sell it today you would earn a total of  24.00  from holding Dividend 15 Split or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bausch Health Companies  vs.  Dividend 15 Split

Bausch Health Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bausch Health Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bausch Health is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Dividend 15 Split

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dividend is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bausch Health and Dividend

The main advantage of trading using opposite Bausch Health and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.

The idea behind Bausch Health Companies and Dividend 15 Split pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.