Correlation Between Lindsell Train and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Lindsell Train 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 Lindsell Train and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and Boston Scientific Corp, you can compare the effects of market volatilities on Lindsell Train 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 Lindsell Train with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Boston Scientific.
Diversification Opportunities for Lindsell Train and Boston Scientific
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lindsell and Boston is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment 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 Lindsell Train 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 Lindsell Train Investment 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 Lindsell Train i.e., Lindsell Train and Boston Scientific go up and down completely randomly.
Pair Corralation between Lindsell Train and Boston Scientific
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Boston Scientific. In addition to that, Lindsell Train is 1.19 times more volatile than Boston Scientific Corp. It trades about -0.02 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.13 per unit of volatility. If you would invest 4,786 in Boston Scientific Corp on October 28, 2024 and sell it today you would earn a total of 5,376 from holding Boston Scientific Corp or generate 112.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Lindsell Train Investment vs. Boston Scientific Corp
Performance |
| Timeline |
| Lindsell Train Investment |
| Boston Scientific Corp |
Lindsell Train and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Boston Scientific
The main advantage of trading using opposite Lindsell Train and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train 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.| Lindsell Train vs. SupplyMe Capital PLC | Lindsell Train vs. Premier African Minerals | Lindsell Train vs. SANTANDER UK 8 | Lindsell Train vs. Tower Resources plc |
| Boston Scientific vs. Ecclesiastical Insurance Office | Boston Scientific vs. Roebuck Food Group | Boston Scientific vs. DFS Furniture PLC | Boston Scientific vs. Edita Food Industries |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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