Correlation Between Bausch and LuxUrban Hotels

Can any of the company-specific risk be diversified away by investing in both Bausch and LuxUrban Hotels 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 LuxUrban Hotels 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 LuxUrban Hotels 1300, you can compare the effects of market volatilities on Bausch and LuxUrban Hotels 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 LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch and LuxUrban Hotels.

Diversification Opportunities for Bausch and LuxUrban Hotels

0.0

Correlation Coefficient

Bausch  LuxUrban Hotels

Pay attention - limited upside

The 3 months correlation between Bausch and LuxUrban is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and LuxUrban Hotels 1300 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 1300 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 LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels 1300 has no effect on the direction of Bausch i.e., Bausch and LuxUrban Hotels go up and down completely randomly.

Pair Corralation between Bausch and LuxUrban Hotels

If you would invest (100.00) in LuxUrban Hotels 1300 on December 25, 2024 and sell it today you would earn a total of  100.00  from holding LuxUrban Hotels 1300 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bausch Health Companies  vs.  LuxUrban Hotels 1300

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 uncertain 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.

LuxUrban Hotels 1300

Risk-Adjusted Performance

Very Weak

Over the last 90 days LuxUrban Hotels 1300 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, LuxUrban Hotels is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bausch and LuxUrban Hotels

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

The idea behind Bausch Health Companies and LuxUrban Hotels 1300 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.