Correlation Between Boston Scientific and Guided Therapeutics
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Guided Therapeutics 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 Guided Therapeutics 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 Guided Therapeutics, you can compare the effects of market volatilities on Boston Scientific and Guided Therapeutics 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 Guided Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Guided Therapeutics.
Diversification Opportunities for Boston Scientific and Guided Therapeutics
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Guided is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Guided Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guided Therapeutics 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 Guided Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guided Therapeutics has no effect on the direction of Boston Scientific i.e., Boston Scientific and Guided Therapeutics go up and down completely randomly.
Pair Corralation between Boston Scientific and Guided Therapeutics
Considering the 90-day investment horizon Boston Scientific is expected to generate 4.97 times less return on investment than Guided Therapeutics. But when comparing it to its historical volatility, Boston Scientific Corp is 12.32 times less risky than Guided Therapeutics. It trades about 0.14 of its potential returns per unit of risk. Guided Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Guided Therapeutics on November 2, 2024 and sell it today you would lose (14.00) from holding Guided Therapeutics or give up 53.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. Guided Therapeutics
Performance |
| Timeline |
| Boston Scientific Corp |
| Guided Therapeutics |
Boston Scientific and Guided Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Guided Therapeutics
The main advantage of trading using opposite Boston Scientific and Guided Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Guided Therapeutics 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 Guided Therapeutics will offset losses from the drop in Guided Therapeutics' long position.| Boston Scientific vs. Stryker | Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. DexCom Inc |
| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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