Correlation Between Boston Scientific and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Lindsell Train 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 Boston Scientific and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Scientific Corp and Lindsell Train Investment, you can compare the effects of market volatilities on Boston Scientific and Lindsell Train 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 Boston Scientific with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Lindsell Train.
Diversification Opportunities for Boston Scientific and Lindsell Train
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boston and Lindsell is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment and Boston Scientific 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 Boston Scientific Corp are associated (or correlated) with Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Boston Scientific i.e., Boston Scientific and Lindsell Train go up and down completely randomly.
Pair Corralation between Boston Scientific and Lindsell Train
Assuming the 90 days trading horizon Boston Scientific Corp is expected to generate 0.84 times more return on investment than Lindsell Train. However, Boston Scientific Corp is 1.2 times less risky than Lindsell Train. It trades about 0.13 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.03 per unit of risk. If you would invest 4,605 in Boston Scientific Corp on October 14, 2024 and sell it today you would earn a total of 4,921 from holding Boston Scientific Corp or generate 106.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Boston Scientific Corp vs. Lindsell Train Investment
Performance |
| Timeline |
| Boston Scientific Corp |
| Lindsell Train Investment |
Boston Scientific and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Lindsell Train
The main advantage of trading using opposite Boston Scientific and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Boston Scientific vs. Lindsell Train Investment | Boston Scientific vs. Charter Communications Cl | Boston Scientific vs. Primorus Investments plc | Boston Scientific vs. Seraphim Space Investment |
| Lindsell Train vs. Gamma Communications PLC | Lindsell Train vs. Telecom Italia SpA | Lindsell Train vs. Cellnex Telecom SA | Lindsell Train vs. Universal Display Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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