Correlation Between Coca Cola and Bausch
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By analyzing existing cross correlation between The Coca Cola and Bausch Health Companies, you can compare the effects of market volatilities on Coca Cola and Bausch 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 Coca Cola with a short position of Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Bausch.
Diversification Opportunities for Coca Cola and Bausch
Pay attention - limited upside
The 3 months correlation between Coca and Bausch is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies and Coca Cola 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 The Coca Cola are associated (or correlated) with Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Coca Cola i.e., Coca Cola and Bausch go up and down completely randomly.
Pair Corralation between Coca Cola and Bausch
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Bausch. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 3.14 times less risky than Bausch. The stock trades about -0.21 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,924 in Bausch Health Companies on September 7, 2024 and sell it today you would earn a total of 814.00 from holding Bausch Health Companies or generate 16.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 71.88% |
Values | Daily Returns |
The Coca Cola vs. Bausch Health Companies
Performance |
Timeline |
Coca Cola |
Bausch Health Companies |
Coca Cola and Bausch Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coca Cola and Bausch
The main advantage of trading using opposite Coca Cola and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Bausch 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 will offset losses from the drop in Bausch's long position.Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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