Correlation Between Bausch Health and PIRS Old

Can any of the company-specific risk be diversified away by investing in both Bausch Health and PIRS Old 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 PIRS Old 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 PIRS Old, you can compare the effects of market volatilities on Bausch Health and PIRS Old 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 PIRS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and PIRS Old.

Diversification Opportunities for Bausch Health and PIRS Old

0.0

Correlation Coefficient

Bausch Health  PIRS Old

Pay attention - limited upside

The 3 months correlation between Bausch and PIRS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and PIRS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIRS Old 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 PIRS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIRS Old has no effect on the direction of Bausch Health i.e., Bausch Health and PIRS Old go up and down completely randomly.

Pair Corralation between Bausch Health and PIRS Old

If you would invest (100.00) in PIRS Old on December 1, 2024 and sell it today you would earn a total of  100.00  from holding PIRS Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bausch Health Companies  vs.  PIRS Old

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 rather sound technical indicators, Bausch Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

PIRS Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PIRS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PIRS Old 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 PIRS Old

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

The idea behind Bausch Health Companies and PIRS Old 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.