Correlation Between Community Health and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Community Health and Boston Scientific 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 Community Health and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Health Systems and Boston Scientific Corp, you can compare the effects of market volatilities on Community Health and Boston Scientific 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 Community Health with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Health and Boston Scientific.
Diversification Opportunities for Community Health and Boston Scientific
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Community and Boston is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Community Health Systems and Boston Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific Corp and Community Health 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 Community Health Systems are associated (or correlated) with Boston Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Scientific Corp has no effect on the direction of Community Health i.e., Community Health and Boston Scientific go up and down completely randomly.
Pair Corralation between Community Health and Boston Scientific
Considering the 90-day investment horizon Community Health is expected to generate 9.21 times less return on investment than Boston Scientific. In addition to that, Community Health is 3.89 times more volatile than Boston Scientific Corp. It trades about 0.01 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.19 per unit of volatility. If you would invest 5,992 in Boston Scientific Corp on October 20, 2024 and sell it today you would earn a total of 3,874 from holding Boston Scientific Corp or generate 64.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Community Health Systems vs. Boston Scientific Corp
Performance |
| Timeline |
| Community Health Systems |
| Boston Scientific Corp |
Community Health and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community Health and Boston Scientific
The main advantage of trading using opposite Community Health and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Health position performs unexpectedly, Boston Scientific 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 Boston Scientific will offset losses from the drop in Boston Scientific's long position.| Community Health vs. Universal Health Services | Community Health vs. HCA Holdings | Community Health vs. Surgery Partners | Community Health vs. Acadia Healthcare |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |