Correlation Between Boston Scientific and Japan Medical
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Japan 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 Japan 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 Japan Medical Dynamic, you can compare the effects of market volatilities on Boston Scientific and Japan 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 Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Japan Medical.
Diversification Opportunities for Boston Scientific and Japan Medical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and Japan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of Boston Scientific i.e., Boston Scientific and Japan Medical go up and down completely randomly.
Pair Corralation between Boston Scientific and Japan Medical
Assuming the 90 days horizon Boston Scientific is expected to generate 1.46 times more return on investment than Japan Medical. However, Boston Scientific is 1.46 times more volatile than Japan Medical Dynamic. It trades about 0.28 of its potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.09 per unit of risk. If you would invest 8,650 in Boston Scientific on November 4, 2024 and sell it today you would earn a total of 1,350 from holding Boston Scientific or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific vs. Japan Medical Dynamic
Performance |
| Timeline |
| Boston Scientific |
| Japan Medical Dynamic |
Boston Scientific and Japan Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Japan Medical
The main advantage of trading using opposite Boston Scientific and Japan Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Japan 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 Japan Medical will offset losses from the drop in Japan Medical's long position.| Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. Stryker | Boston Scientific vs. Becton Dickinson and |
| Japan Medical vs. Xenia Hotels Resorts | Japan Medical vs. INDO RAMA SYNTHETIC | Japan Medical vs. BRAEMAR HOTELS RES | Japan Medical vs. KINGBOARD CHEMICAL |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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