Correlation Between Bausch and Hf Foods

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

Diversification Opportunities for Bausch and Hf Foods

-0.7

Correlation Coefficient

Bausch  Hf Foods

Excellent diversification

The 3 months correlation between Bausch and HFFG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group 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 Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of Bausch i.e., Bausch and Hf Foods go up and down completely randomly.

Pair Corralation between Bausch and Hf Foods

Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Hf Foods. In addition to that, Bausch is 1.28 times more volatile than Hf Foods Group. It trades about -0.14 of its total potential returns per unit of risk. Hf Foods Group is currently generating about 0.04 per unit of volatility. If you would invest  329.00  in Hf Foods Group on December 22, 2024 and sell it today you would earn a total of  22.00  from holding Hf Foods Group or generate 6.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	49.18%
Values	Daily Returns

Bausch Health Companies  vs.  Hf Foods Group

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 fragile 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.

Hf Foods Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hf Foods Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Hf Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bausch and Hf Foods

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

The idea behind Bausch Health Companies and Hf Foods Group 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 Stocks Directory module to find actively traded stocks across global markets.