Correlation Between Daxor and Bausch Lomb

Can any of the company-specific risk be diversified away by investing in both Daxor and Bausch Lomb 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 Daxor and Bausch Lomb into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daxor and Bausch Lomb Corp, you can compare the effects of market volatilities on Daxor and Bausch Lomb 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 Daxor with a short position of Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daxor and Bausch Lomb.

Diversification Opportunities for Daxor and Bausch Lomb

-0.79

Correlation Coefficient

Daxor  Bausch Lomb

Pay attention - limited upside

The 3 months correlation between Daxor and Bausch is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Daxor and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp and Daxor 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 Daxor are associated (or correlated) with Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Daxor i.e., Daxor and Bausch Lomb go up and down completely randomly.

Pair Corralation between Daxor and Bausch Lomb

Considering the 90-day investment horizon Daxor is expected to under-perform the Bausch Lomb. But the stock apears to be less risky and, when comparing its historical volatility, Daxor is 1.14 times less risky than Bausch Lomb. The stock trades about -0.34 of its potential returns per unit of risk. The Bausch Lomb Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,444  in Bausch Lomb Corp on March 7, 2024 and sell it today you would earn a total of  74.00  from holding Bausch Lomb Corp or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

Daxor  vs.  Bausch Lomb Corp

Daxor

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daxor are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Daxor reported solid returns over the last few months and may actually be approaching a breakup point.

Bausch Lomb Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bausch Lomb Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Daxor and Bausch Lomb

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

The idea behind Daxor and Bausch Lomb 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.