Correlation Between Ensign and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Ensign 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 Ensign and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and Boston Scientific Corp, you can compare the effects of market volatilities on Ensign 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 Ensign with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Boston Scientific.
Diversification Opportunities for Ensign and Boston Scientific
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ensign and Boston is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group 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 Ensign 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 The Ensign Group 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 Ensign i.e., Ensign and Boston Scientific go up and down completely randomly.
Pair Corralation between Ensign and Boston Scientific
Given the investment horizon of 90 days Ensign is expected to generate 2.61 times less return on investment than Boston Scientific. In addition to that, Ensign is 1.24 times more volatile than Boston Scientific Corp. It trades about 0.06 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 |
The Ensign Group vs. Boston Scientific Corp
Performance |
| Timeline |
| Ensign Group |
| Boston Scientific Corp |
Ensign and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Boston Scientific
The main advantage of trading using opposite Ensign and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign 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.| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign vs. National 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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