Correlation Between Bausch Health and Air Canada
Can any of the company-specific risk be diversified away by investing in both Bausch Health and Air Canada 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 Air Canada 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 Air Canada, you can compare the effects of market volatilities on Bausch Health and Air Canada 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 Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Air Canada.
Diversification Opportunities for Bausch Health and Air Canada
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bausch and Air is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada 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 Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Bausch Health i.e., Bausch Health and Air Canada go up and down completely randomly.
Pair Corralation between Bausch Health and Air Canada
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Air Canada. In addition to that, Bausch Health is 2.15 times more volatile than Air Canada. It trades about -0.07 of its total potential returns per unit of risk. Air Canada is currently generating about -0.06 per unit of volatility. If you would invest 1,961 in Air Canada on August 27, 2025 and sell it today you would lose (116.00) from holding Air Canada or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Health Companies vs. Air Canada
Performance |
| Timeline |
| Bausch Health Companies |
| Air Canada |
Bausch Health and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Health and Air Canada
The main advantage of trading using opposite Bausch Health and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Health position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| Bausch Health vs. Getty Copper | Bausch Health vs. Waste Management, | Bausch Health vs. Wilmington Capital Management | Bausch Health vs. Arizona Metals Corp |
| Air Canada vs. A W FOOD | Air Canada vs. High Liner Foods | Air Canada vs. Talon Metals Corp | Air Canada vs. Magna Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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