Correlation Between Chimerix and Bausch Lomb

Can any of the company-specific risk be diversified away by investing in both Chimerix and Bausch Lomb 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 Chimerix and Bausch Lomb into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chimerix and Bausch Lomb Corp, you can compare the effects of market volatilities on Chimerix and Bausch Lomb 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 Chimerix with a short position of Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and Bausch Lomb.

Diversification Opportunities for Chimerix and Bausch Lomb

-0.81

Correlation Coefficient

Chimerix  Bausch Lomb

Pay attention - limited upside

The 3 months correlation between Chimerix and Bausch is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp and Chimerix 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 Chimerix are associated (or correlated) with Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Chimerix i.e., Chimerix and Bausch Lomb go up and down completely randomly.

Pair Corralation between Chimerix and Bausch Lomb

Given the investment horizon of 90 days Chimerix is expected to generate 4.97 times more return on investment than Bausch Lomb. However, Chimerix is 4.97 times more volatile than Bausch Lomb Corp. It trades about 0.19 of its potential returns per unit of risk. Bausch Lomb Corp is currently generating about -0.18 per unit of risk. If you would invest  344.00  in Chimerix on December 29, 2024 and sell it today you would earn a total of  506.00  from holding Chimerix or generate 147.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Chimerix  vs.  Bausch Lomb Corp

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

Bausch Lomb Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bausch Lomb Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Chimerix and Bausch Lomb

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

The idea behind Chimerix and Bausch Lomb Corp 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.