Correlation Between Bausch Health and Winpak
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Winpak 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 Winpak 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 Winpak, you can compare the effects of market volatilities on Bausch Health and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Winpak.
Diversification Opportunities for Bausch Health and Winpak
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Winpak is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Bausch Health i.e., Bausch Health and Winpak go up and down completely randomly.
Pair Corralation between Bausch Health and Winpak
Assuming the 90 days trading horizon Bausch Health Companies is expected to generate 2.16 times more return on investment than Winpak. However, Bausch Health is 2.16 times more volatile than Winpak. It trades about -0.02 of its potential returns per unit of risk. Winpak is currently generating about -0.13 per unit of risk. If you would invest 1,113 in Bausch Health Companies on September 25, 2024 and sell it today you would lose (28.00) from holding Bausch Health Companies or give up 2.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bausch Health Companies vs. Winpak
Performance |
Timeline |
Bausch Health Companies |
Winpak |
Bausch Health and Winpak Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Health and Winpak
The main advantage of trading using opposite Bausch Health and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.Bausch Health vs. Decibel Cannabis | Bausch Health vs. Cannara Biotech | Bausch Health vs. iShares Canadian HYBrid | Bausch Health vs. Altagas Cum Red |
Winpak vs. Bausch Health Companies | Winpak vs. Quipt Home Medical | Winpak vs. NeXGold Mining Corp | Winpak vs. WELL Health Technologies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |