Correlation Between Voya Us and Bausch

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

By analyzing existing cross correlation between Voya Stock Index and Bausch Health Companies, you can compare the effects of market volatilities on Voya Us and Bausch 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 Voya Us with a short position of Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Us and Bausch.

Diversification Opportunities for Voya Us and Bausch

-0.3

Correlation Coefficient

Voya Us  Bausch

Very good diversification

The 3 months correlation between Voya and Bausch is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies and Voya Us 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 Voya Stock Index are associated (or correlated) with Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Voya Us i.e., Voya Us and Bausch go up and down completely randomly.

Pair Corralation between Voya Us and Bausch

Assuming the 90 days horizon Voya Stock Index is expected to generate 0.19 times more return on investment than Bausch. However, Voya Stock Index is 5.2 times less risky than Bausch. It trades about -0.05 of its potential returns per unit of risk. Bausch Health Companies is currently generating about -0.02 per unit of risk. If you would invest  2,003  in Voya Stock Index on December 28, 2024 and sell it today you would lose (69.00) from holding Voya Stock Index or give up 3.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Voya Stock Index  vs.  Bausch Health Companies

Voya Stock Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Stock Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Voya Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bausch Health Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bausch Health Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Bausch Health Companies investors.

Pair Trading with Voya Us and Bausch

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

The idea behind Voya Stock Index and Bausch Health Companies 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 Global Correlations module to find global opportunities by holding instruments from different markets.