Correlation Between Becton Dickinson and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Becton Dickinson and Boston Scientific 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 Boston Scientific 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 Boston Scientific, you can compare the effects of market volatilities on Becton Dickinson and Boston Scientific 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 Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and Boston Scientific.
Diversification Opportunities for Becton Dickinson and Boston Scientific
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Becton and Boston is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Boston Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific 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 Boston Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Scientific has no effect on the direction of Becton Dickinson i.e., Becton Dickinson and Boston Scientific go up and down completely randomly.
Pair Corralation between Becton Dickinson and Boston Scientific
Assuming the 90 days horizon Becton Dickinson and is expected to under-perform the Boston Scientific. In addition to that, Becton Dickinson is 1.63 times more volatile than Boston Scientific. It trades about -0.03 of its total potential returns per unit of risk. Boston Scientific is currently generating about 0.25 per unit of volatility. If you would invest 7,800 in Boston Scientific on August 29, 2024 and sell it today you would earn a total of 650.00 from holding Boston Scientific or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Becton Dickinson and vs. Boston Scientific
Performance |
| Timeline |
| Becton Dickinson |
| Boston Scientific |
Becton Dickinson and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becton Dickinson and Boston Scientific
The main advantage of trading using opposite Becton Dickinson and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson position performs unexpectedly, Boston Scientific 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 Boston Scientific will offset losses from the drop in Boston Scientific's long position.| Becton Dickinson vs. Intuitive Surgical | Becton Dickinson vs. Superior Plus Corp | Becton Dickinson vs. NMI Holdings | Becton Dickinson vs. Origin Agritech |
| Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. Stryker | Boston Scientific vs. Becton Dickinson and |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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