Correlation Between Haleon Plc and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Haleon Plc 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 Haleon Plc and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Boston Scientific Corp, you can compare the effects of market volatilities on Haleon Plc 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 Haleon Plc with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Boston Scientific.
Diversification Opportunities for Haleon Plc and Boston Scientific
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haleon and Boston is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Haleon 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 Haleon Plc 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 Haleon 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 Haleon Plc i.e., Haleon Plc and Boston Scientific go up and down completely randomly.
Pair Corralation between Haleon Plc and Boston Scientific
Considering the 90-day investment horizon Haleon plc is expected to under-perform the Boston Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 1.23 times less risky than Boston Scientific. The stock trades about -0.19 of its potential returns per unit of risk. The Boston Scientific Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 8,476 in Boston Scientific Corp on August 28, 2024 and sell it today you would earn a total of 449.00 from holding Boston Scientific Corp or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Boston Scientific Corp
Performance |
| Timeline |
| Haleon plc |
| Boston Scientific Corp |
Haleon Plc and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Boston Scientific
The main advantage of trading using opposite Haleon Plc and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc 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.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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