Correlation Between Bausch Health and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both Bausch Health and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on Bausch Health and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and GAMESTOP.
Diversification Opportunities for Bausch Health and GAMESTOP
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bausch and GAMESTOP is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Bausch Health i.e., Bausch Health and GAMESTOP go up and down completely randomly.
Pair Corralation between Bausch Health and GAMESTOP
Assuming the 90 days horizon Bausch Health is expected to generate 7.68 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, Bausch Health Companies is 2.8 times less risky than GAMESTOP. It trades about 0.02 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,630 in GAMESTOP on September 20, 2024 and sell it today you would earn a total of 1,360 from holding GAMESTOP or generate 83.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bausch Health Companies vs. GAMESTOP
Performance |
Timeline |
Bausch Health Companies |
GAMESTOP |
Bausch Health and GAMESTOP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Health and GAMESTOP
The main advantage of trading using opposite Bausch Health and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.Bausch Health vs. Salesforce | Bausch Health vs. Playa Hotels Resorts | Bausch Health vs. Fast Retailing Co | Bausch Health vs. SIDETRADE EO 1 |
GAMESTOP vs. EHEALTH | GAMESTOP vs. SPORTING | GAMESTOP vs. Bausch Health Companies | GAMESTOP vs. GUARDANT HEALTH CL |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |