Correlation Between DFS Furniture and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Boston Scientific Corp, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Boston Scientific.
Diversification Opportunities for DFS Furniture and Boston Scientific
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DFS and Boston is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and Boston Scientific go up and down completely randomly.
Pair Corralation between DFS Furniture and Boston Scientific
Assuming the 90 days trading horizon DFS Furniture PLC is expected to under-perform the Boston Scientific. In addition to that, DFS Furniture is 1.76 times more volatile than Boston Scientific Corp. It trades about -0.08 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.47 per unit of volatility. If you would invest 9,115 in Boston Scientific Corp on November 6, 2024 and sell it today you would earn a total of 1,251 from holding Boston Scientific Corp or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Boston Scientific Corp
Performance |
| Timeline |
| DFS Furniture PLC |
| Boston Scientific Corp |
DFS Furniture and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Boston Scientific
The main advantage of trading using opposite DFS Furniture and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. FC Investment Trust | DFS Furniture vs. Vietnam Enterprise Investments | DFS Furniture vs. Kinnevik Investment AB | DFS Furniture vs. OneSavings Bank PLC |
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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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