Correlation Between Bausch Lomb and Repligen
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Repligen 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 Repligen 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 Repligen, you can compare the effects of market volatilities on Bausch Lomb and Repligen 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 Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Repligen.
Diversification Opportunities for Bausch Lomb and Repligen
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bausch and Repligen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen 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 Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Repligen go up and down completely randomly.
Pair Corralation between Bausch Lomb and Repligen
Given the investment horizon of 90 days Bausch Lomb Corp is expected to under-perform the Repligen. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Lomb Corp is 1.64 times less risky than Repligen. The stock trades about -0.18 of its potential returns per unit of risk. The Repligen is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14,381 in Repligen on December 29, 2024 and sell it today you would lose (1,040) from holding Repligen or give up 7.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bausch Lomb Corp vs. Repligen
Performance |
Timeline |
Bausch Lomb Corp |
Repligen |
Bausch Lomb and Repligen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Lomb and Repligen
The main advantage of trading using opposite Bausch Lomb and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Repligen 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 Repligen will offset losses from the drop in Repligen'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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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