Correlation Between Edwards Lifesciences and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences 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 Edwards Lifesciences and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edwards Lifesciences Corp and Boston Scientific Corp, you can compare the effects of market volatilities on Edwards Lifesciences 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 Edwards Lifesciences with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Boston Scientific.
Diversification Opportunities for Edwards Lifesciences and Boston Scientific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edwards and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp 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 Edwards Lifesciences 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 Edwards Lifesciences Corp 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 Edwards Lifesciences i.e., Edwards Lifesciences and Boston Scientific go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Boston Scientific
Allowing for the 90-day total investment horizon Edwards Lifesciences is expected to generate 15.1 times less return on investment than Boston Scientific. In addition to that, Edwards Lifesciences is 1.16 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 0.22 per unit of volatility. If you would invest 8,510 in Boston Scientific Corp on August 25, 2024 and sell it today you would earn a total of 490.00 from holding Boston Scientific Corp or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Boston Scientific Corp
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Boston Scientific Corp |
Edwards Lifesciences and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Boston Scientific
The main advantage of trading using opposite Edwards Lifesciences and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences 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.| Edwards Lifesciences vs. Medtronic PLC | Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. Zimmer Biomet Holdings |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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