Correlation Between Dupont De and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Boston Scientific Corp, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Boston Scientific.
Diversification Opportunities for Dupont De and Boston Scientific
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Boston is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours 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 Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Boston Scientific go up and down completely randomly.
Pair Corralation between Dupont De and Boston Scientific
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.22 times less return on investment than Boston Scientific. In addition to that, Dupont De is 1.34 times more volatile than Boston Scientific Corp. It trades about 0.19 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.55 per unit of volatility. If you would invest 9,595 in Boston Scientific Corp on November 9, 2024 and sell it today you would earn a total of 907.00 from holding Boston Scientific Corp or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Boston Scientific Corp
Performance |
| Timeline |
| Dupont De Nemours |
| Boston Scientific Corp |
Dupont De and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Boston Scientific
The main advantage of trading using opposite Dupont De and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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