Correlation Between Bausch Health and Applied Materials,

Can any of the company-specific risk be diversified away by investing in both Bausch Health and Applied Materials, 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 Applied Materials, 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 Applied Materials,, you can compare the effects of market volatilities on Bausch Health and Applied Materials, 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 Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Health and Applied Materials,.

Diversification Opportunities for Bausch Health and Applied Materials,

-0.05

Correlation Coefficient

Bausch Health  Applied Materials,

Good diversification

The 3 months correlation between Bausch and Applied is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, 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 Applied Materials,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials, has no effect on the direction of Bausch Health i.e., Bausch Health and Applied Materials, go up and down completely randomly.

Pair Corralation between Bausch Health and Applied Materials,

Assuming the 90 days trading horizon Bausch Health is expected to generate 40.88 times less return on investment than Applied Materials,. In addition to that, Bausch Health is 1.23 times more volatile than Applied Materials,. It trades about 0.01 of its total potential returns per unit of risk. Applied Materials, is currently generating about 0.28 per unit of volatility. If you would invest  1,927  in Applied Materials, on September 13, 2025 and sell it today you would earn a total of  1,121  from holding Applied Materials, or generate 58.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bausch Health Companies  vs.  Applied Materials,

Bausch Health Companies

Risk-Adjusted Performance

Weakest

Over the last 90 days Bausch Health Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bausch Health is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Applied Materials,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials, are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Applied Materials, exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bausch Health and Applied Materials,

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

The idea behind Bausch Health Companies and Applied Materials, 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.