Correlation Between National Research and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both National Research 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 National Research and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Research Corp and Boston Scientific Corp, you can compare the effects of market volatilities on National Research 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 National Research with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Research and Boston Scientific.
Diversification Opportunities for National Research and Boston Scientific
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Boston is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding National Research 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 National Research 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 National Research 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 National Research i.e., National Research and Boston Scientific go up and down completely randomly.
Pair Corralation between National Research and Boston Scientific
Considering the 90-day investment horizon National Research Corp is expected to under-perform the Boston Scientific. In addition to that, National Research is 1.94 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 0.15 per unit of volatility. If you would invest 4,623 in Boston Scientific Corp on November 9, 2024 and sell it today you would earn a total of 5,879 from holding Boston Scientific Corp or generate 127.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Research Corp vs. Boston Scientific Corp
Performance |
| Timeline |
| National Research Corp |
| Boston Scientific Corp |
National Research and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Research and Boston Scientific
The main advantage of trading using opposite National Research and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Research 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.| National Research vs. Omega Flex | National Research vs. NI Holdings | National Research vs. PC Connection | National Research vs. Northrim BanCorp |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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