Correlation Between Bausch Health and Hancock Horizon
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Hancock Horizon 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 Health and Hancock Horizon 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 Hancock Horizon Diversified, you can compare the effects of market volatilities on Bausch Health and Hancock Horizon 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 Health with a short position of Hancock Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Hancock Horizon.
Diversification Opportunities for Bausch Health and Hancock Horizon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bausch and Hancock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Hancock Horizon Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Horizon Dive and Bausch Health 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 Hancock Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Horizon Dive has no effect on the direction of Bausch Health i.e., Bausch Health and Hancock Horizon go up and down completely randomly.
Pair Corralation between Bausch Health and Hancock Horizon
If you would invest 828.00 in Bausch Health Companies on January 19, 2024 and sell it today you would earn a total of 32.00 from holding Bausch Health Companies or generate 3.86% 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. Hancock Horizon Diversified
Performance |
| Timeline |
| Bausch Health Companies |
| Hancock Horizon Dive |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bausch Health and Hancock Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Hancock Horizon
The main advantage of trading using opposite Bausch Health and Hancock Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Hancock Horizon 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 Hancock Horizon will offset losses from the drop in Hancock Horizon's long position.The idea behind Bausch Health Companies and Hancock Horizon Diversified 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.| Hancock Horizon vs. The Hartford Floating | Hancock Horizon vs. Ppm High Yield | Hancock Horizon vs. The Hartford Floating | Hancock Horizon vs. Intal High Relative |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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