Correlation Between Bausch and Ballys Corp

Can any of the company-specific risk be diversified away by investing in both Bausch and Ballys Corp 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 and Ballys Corp 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 Ballys Corp, you can compare the effects of market volatilities on Bausch and Ballys Corp 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 with a short position of Ballys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch and Ballys Corp.

Diversification Opportunities for Bausch and Ballys Corp

-0.13

Correlation Coefficient

Bausch  Ballys Corp

Good diversification

The 3 months correlation between Bausch and Ballys is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Ballys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballys Corp and Bausch 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 Ballys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballys Corp has no effect on the direction of Bausch i.e., Bausch and Ballys Corp go up and down completely randomly.

Pair Corralation between Bausch and Ballys Corp

Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Ballys Corp. In addition to that, Bausch is 1.0 times more volatile than Ballys Corp. It trades about -0.12 of its total potential returns per unit of risk. Ballys Corp is currently generating about 0.03 per unit of volatility. If you would invest  1,775  in Ballys Corp on December 24, 2024 and sell it today you would lose (5.00) from holding Ballys Corp or give up 0.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.54%
Values	Daily Returns

Bausch Health Companies  vs.  Ballys Corp

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

Ballys Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ballys Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, Ballys Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bausch and Ballys Corp

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

The idea behind Bausch Health Companies and Ballys 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.