Correlation Between Bausch Lomb and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Barrick Gold 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 Lomb and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Lomb Corp and Barrick Gold Corp, you can compare the effects of market volatilities on Bausch Lomb and Barrick Gold 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 Lomb with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Barrick Gold.
Diversification Opportunities for Bausch Lomb and Barrick Gold
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bausch and Barrick is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp and Bausch Lomb 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 Lomb Corp are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Barrick Gold go up and down completely randomly.
Pair Corralation between Bausch Lomb and Barrick Gold
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 1.38 times more return on investment than Barrick Gold. However, Bausch Lomb is 1.38 times more volatile than Barrick Gold Corp. It trades about 0.15 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.1 per unit of risk. If you would invest 1,582 in Bausch Lomb Corp on September 11, 2024 and sell it today you would earn a total of 423.00 from holding Bausch Lomb Corp or generate 26.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bausch Lomb Corp vs. Barrick Gold Corp
Performance |
Timeline |
Bausch Lomb Corp |
Barrick Gold Corp |
Bausch Lomb and Barrick Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Lomb and Barrick Gold
The main advantage of trading using opposite Bausch Lomb and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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