Correlation Between Boston Scientific and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Peijia Medical 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 Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Scientific and Peijia Medical Limited, you can compare the effects of market volatilities on Boston Scientific and Peijia Medical 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 Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Peijia Medical.
Diversification Opportunities for Boston Scientific and Peijia Medical
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boston and Peijia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical 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 are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Boston Scientific i.e., Boston Scientific and Peijia Medical go up and down completely randomly.
Pair Corralation between Boston Scientific and Peijia Medical
Assuming the 90 days horizon Boston Scientific is expected to generate 0.46 times more return on investment than Peijia Medical. However, Boston Scientific is 2.19 times less risky than Peijia Medical. It trades about 0.18 of its potential returns per unit of risk. Peijia Medical Limited is currently generating about 0.06 per unit of risk. If you would invest 8,400 in Boston Scientific on October 10, 2024 and sell it today you would earn a total of 300.00 from holding Boston Scientific or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific vs. Peijia Medical Limited
Performance |
| Timeline |
| Boston Scientific |
| Peijia Medical |
Boston Scientific and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Peijia Medical
The main advantage of trading using opposite Boston Scientific and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. Stryker | Boston Scientific vs. Becton Dickinson and |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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