Correlation Between Bausch Lomb and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Bausch Lomb and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Sellas Life.
Diversification Opportunities for Bausch Lomb and Sellas Life
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bausch and Sellas is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Sellas Life go up and down completely randomly.
Pair Corralation between Bausch Lomb and Sellas Life
Given the investment horizon of 90 days Bausch Lomb Corp is expected to under-perform the Sellas Life. But the stock apears to be less risky and, when comparing its historical volatility, Bausch Lomb Corp is 3.37 times less risky than Sellas Life. The stock trades about -0.13 of its potential returns per unit of risk. The Sellas Life Sciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Sellas Life Sciences on December 1, 2024 and sell it today you would earn a total of 2.00 from holding Sellas Life Sciences or generate 1.72% 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. Sellas Life Sciences
Performance |
Timeline |
Bausch Lomb Corp |
Sellas Life Sciences |
Bausch Lomb and Sellas Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Lomb and Sellas Life
The main advantage of trading using opposite Bausch Lomb and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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