Correlation Between Bausch Lomb and ABB
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and ABB 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 ABB 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 ABB, you can compare the effects of market volatilities on Bausch Lomb and ABB 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 ABB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and ABB.
Diversification Opportunities for Bausch Lomb and ABB
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and ABB is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB 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 ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and ABB go up and down completely randomly.
Pair Corralation between Bausch Lomb and ABB
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 0.92 times more return on investment than ABB. However, Bausch Lomb Corp is 1.09 times less risky than ABB. It trades about 0.09 of its potential returns per unit of risk. ABB is currently generating about 0.02 per unit of risk. If you would invest 1,417 in Bausch Lomb Corp on August 13, 2025 and sell it today you would earn a total of 138.00 from holding Bausch Lomb Corp or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Lomb Corp vs. ABB
Performance |
| Timeline |
| Bausch Lomb Corp |
| ABB |
Bausch Lomb and ABB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and ABB
The main advantage of trading using opposite Bausch Lomb and ABB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, ABB 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 ABB will offset losses from the drop in ABB's long position.| Bausch Lomb vs. Teleflex Incorporated | Bausch Lomb vs. Merit Medical Systems | Bausch Lomb vs. Vaxcyte | Bausch Lomb vs. Crispr Therapeutics AG |
| ABB vs. Rolls Royce Holdings PLC | ABB vs. Rolls Royce Holdings | ABB vs. Safran SA | ABB vs. Schneider Electric SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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