Correlation Between Robix Environmental and Bausch

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

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

Diversification Opportunities for Robix Environmental and Bausch

0.0

Correlation Coefficient

Robix Environmental  Bausch

Pay attention - limited upside

The 3 months correlation between Robix and Bausch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Robix Environmental Technologi 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 Robix Environmental 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 Robix Environmental Technologies 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 Robix Environmental i.e., Robix Environmental and Bausch go up and down completely randomly.

Pair Corralation between Robix Environmental and Bausch

Assuming the 90 days horizon Robix Environmental is expected to generate 1.33 times less return on investment than Bausch. But when comparing it to its historical volatility, Robix Environmental Technologies is 1.16 times less risky than Bausch. It trades about 0.04 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,109  in Bausch Health Companies on October 11, 2024 and sell it today you would lose (709.00) from holding Bausch Health Companies or give up 9.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	74.95%
Values	Daily Returns

Robix Environmental Technologi  vs.  Bausch Health Companies

Robix Environmental

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Robix Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Robix Environmental is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Bausch Health Companies

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for Bausch Health Companies investors.

Pair Trading with Robix Environmental and Bausch

The main advantage of trading using opposite Robix Environmental and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robix Environmental 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 Robix Environmental Technologies 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.