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

0.67

Correlation Coefficient

Voya Us  Bausch

Poor diversification

The 3 months correlation between Voya and Bausch is 0.67. 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 Us is expected to generate 4.85 times less return on investment than Bausch. But when comparing it to its historical volatility, Voya Stock Index is 3.37 times less risky than Bausch. It trades about 0.06 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,354  in Bausch Health Companies on October 10, 2024 and sell it today you would earn a total of  1,996  from holding Bausch Health Companies or generate 45.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	63.71%
Values	Daily Returns

Voya Stock Index  vs.  Bausch Health Companies

Voya Stock Index

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Stock Index are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. 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

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bausch Health Companies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Bausch may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.