Correlation Between Boston Scientific and Cerus
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Cerus 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 Cerus 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 Cerus, you can compare the effects of market volatilities on Boston Scientific and Cerus 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 Cerus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Cerus.
Diversification Opportunities for Boston Scientific and Cerus
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Boston and Cerus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Cerus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerus 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 Cerus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerus has no effect on the direction of Boston Scientific i.e., Boston Scientific and Cerus go up and down completely randomly.
Pair Corralation between Boston Scientific and Cerus
Considering the 90-day investment horizon Boston Scientific Corp is expected to generate 0.22 times more return on investment than Cerus. However, Boston Scientific Corp is 4.59 times less risky than Cerus. It trades about 0.19 of its potential returns per unit of risk. Cerus is currently generating about -0.01 per unit of risk. If you would invest 5,599 in Boston Scientific Corp on September 20, 2024 and sell it today you would earn a total of 3,444 from holding Boston Scientific Corp or generate 61.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. Cerus
Performance |
| Timeline |
| Boston Scientific Corp |
| Cerus |
Boston Scientific and Cerus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Cerus
The main advantage of trading using opposite Boston Scientific and Cerus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Cerus 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 Cerus will offset losses from the drop in Cerus' 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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