Correlation Between Optima Health and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Optima Health 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 Optima Health and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Boston Scientific Corp, you can compare the effects of market volatilities on Optima Health 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 Optima Health with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Boston Scientific.
Diversification Opportunities for Optima Health and Boston Scientific
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Optima and Boston is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health 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 Optima Health 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 Optima Health 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 Optima Health i.e., Optima Health and Boston Scientific go up and down completely randomly.
Pair Corralation between Optima Health and Boston Scientific
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Boston Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Optima Health plc is 1.65 times less risky than Boston Scientific. The stock trades about -0.47 of its potential returns per unit of risk. The Boston Scientific Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,111 in Boston Scientific Corp on October 16, 2024 and sell it today you would earn a total of 376.00 from holding Boston Scientific Corp or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Optima Health plc vs. Boston Scientific Corp
Performance |
| Timeline |
| Optima Health plc |
| Boston Scientific Corp |
Optima Health and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Boston Scientific
The main advantage of trading using opposite Optima Health and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health 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.| Optima Health vs. FinecoBank SpA | Optima Health vs. TBC Bank Group | Optima Health vs. Metro Bank PLC | Optima Health vs. SoftBank Group Corp |
| Boston Scientific vs. Blackstone Loan Financing | Boston Scientific vs. Tata Steel Limited | Boston Scientific vs. Alliance Data Systems | Boston Scientific vs. Automatic Data Processing |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |