Correlation Between Boston Scientific and Armm
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Armm 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 Armm 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 Armm Inc, you can compare the effects of market volatilities on Boston Scientific and Armm 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 Armm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Armm.
Diversification Opportunities for Boston Scientific and Armm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Armm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Armm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armm Inc 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 Armm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armm Inc has no effect on the direction of Boston Scientific i.e., Boston Scientific and Armm go up and down completely randomly.
Pair Corralation between Boston Scientific and Armm
Considering the 90-day investment horizon Boston Scientific is expected to generate 12.46 times less return on investment than Armm. But when comparing it to its historical volatility, Boston Scientific Corp is 39.94 times less risky than Armm. It trades about 0.12 of its potential returns per unit of risk. Armm Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 51.00 in Armm Inc on September 12, 2024 and sell it today you would lose (50.91) from holding Armm Inc or give up 99.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. Armm Inc
Performance |
| Timeline |
| Boston Scientific Corp |
| Armm Inc |
Boston Scientific and Armm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Armm
The main advantage of trading using opposite Boston Scientific and Armm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Armm 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 Armm will offset losses from the drop in Armm's long position.| Boston Scientific vs. Stryker | Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. DexCom Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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