Correlation Between Bausch Lomb and Mediag3
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Mediag3 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 Lomb and Mediag3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Lomb Corp and Mediag3, you can compare the effects of market volatilities on Bausch Lomb and Mediag3 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 Lomb with a short position of Mediag3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Mediag3.
Diversification Opportunities for Bausch Lomb and Mediag3
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bausch and Mediag3 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Mediag3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediag3 and Bausch Lomb 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 Lomb Corp are associated (or correlated) with Mediag3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediag3 has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Mediag3 go up and down completely randomly.
Pair Corralation between Bausch Lomb and Mediag3
Given the investment horizon of 90 days Bausch Lomb is expected to generate 185.34 times less return on investment than Mediag3. But when comparing it to its historical volatility, Bausch Lomb Corp is 18.33 times less risky than Mediag3. It trades about 0.0 of its potential returns per unit of risk. Mediag3 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Mediag3 on February 10, 2024 and sell it today you would earn a total of 0.01 from holding Mediag3 or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bausch Lomb Corp vs. Mediag3
Performance |
Timeline |
Bausch Lomb Corp |
Mediag3 |
Bausch Lomb and Mediag3 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bausch Lomb and Mediag3
The main advantage of trading using opposite Bausch Lomb and Mediag3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Mediag3 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 Mediag3 will offset losses from the drop in Mediag3's long position.The idea behind Bausch Lomb Corp and Mediag3 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.Mediag3 vs. Vodafone Group PLC | Mediag3 vs. Amrica Mvil SAB | Mediag3 vs. PCCW Limited | Mediag3 vs. Vodacom Group Ltd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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