Correlation Between Boston Scientific and CVRx
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and CVRx 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 CVRx 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 CVRx Inc, you can compare the effects of market volatilities on Boston Scientific and CVRx 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 CVRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and CVRx.
Diversification Opportunities for Boston Scientific and CVRx
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and CVRx is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx 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 CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of Boston Scientific i.e., Boston Scientific and CVRx go up and down completely randomly.
Pair Corralation between Boston Scientific and CVRx
Considering the 90-day investment horizon Boston Scientific is expected to generate 1.83 times less return on investment than CVRx. But when comparing it to its historical volatility, Boston Scientific Corp is 5.0 times less risky than CVRx. It trades about 0.15 of its potential returns per unit of risk. CVRx Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 708.00 in CVRx Inc on November 9, 2024 and sell it today you would earn a total of 763.00 from holding CVRx Inc or generate 107.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. CVRx Inc
Performance |
| Timeline |
| Boston Scientific Corp |
| CVRx Inc |
Boston Scientific and CVRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and CVRx
The main advantage of trading using opposite Boston Scientific and CVRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, CVRx 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 CVRx will offset losses from the drop in CVRx'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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