Correlation Between Becton Dickinson and Hoya Corp
Can any of the company-specific risk be diversified away by investing in both Becton Dickinson and Hoya Corp 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 Becton Dickinson and Hoya Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Becton Dickinson and and Hoya Corp, you can compare the effects of market volatilities on Becton Dickinson and Hoya Corp 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 Becton Dickinson with a short position of Hoya Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and Hoya Corp.
Diversification Opportunities for Becton Dickinson and Hoya Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Becton and Hoya is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and Becton Dickinson 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 Becton Dickinson and are associated (or correlated) with Hoya Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Corp has no effect on the direction of Becton Dickinson i.e., Becton Dickinson and Hoya Corp go up and down completely randomly.
Pair Corralation between Becton Dickinson and Hoya Corp
Considering the 90-day investment horizon Becton Dickinson and is expected to under-perform the Hoya Corp. But the stock apears to be less risky and, when comparing its historical volatility, Becton Dickinson and is 1.57 times less risky than Hoya Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Hoya Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,388 in Hoya Corp on August 31, 2024 and sell it today you would earn a total of 502.00 from holding Hoya Corp or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Becton Dickinson and vs. Hoya Corp
Performance |
| Timeline |
| Becton Dickinson |
| Hoya Corp |
Becton Dickinson and Hoya Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becton Dickinson and Hoya Corp
The main advantage of trading using opposite Becton Dickinson and Hoya Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson position performs unexpectedly, Hoya Corp 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 Hoya Corp will offset losses from the drop in Hoya Corp's long position.| Becton Dickinson vs. Teleflex Incorporated | Becton Dickinson vs. The Cooper Companies, | Becton Dickinson vs. West Pharmaceutical Services | Becton Dickinson vs. ICU Medical |
| Hoya Corp vs. Sysmex Corp | Hoya Corp vs. Straumann Holding AG | Hoya Corp vs. Coloplast AS | Hoya Corp vs. Essilor International 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 CEOs Directory module to screen CEOs from public companies around the world.
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