Correlation Between Pfizer and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Pfizer 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 Pfizer and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Boston Scientific Corp, you can compare the effects of market volatilities on Pfizer 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 Pfizer with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Boston Scientific.
Diversification Opportunities for Pfizer and Boston Scientific
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Boston is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc 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 Pfizer 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 Pfizer Inc 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 Pfizer i.e., Pfizer and Boston Scientific go up and down completely randomly.
Pair Corralation between Pfizer and Boston Scientific
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Boston Scientific. In addition to that, Pfizer is 1.38 times more volatile than Boston Scientific Corp. It trades about -0.22 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.3 per unit of volatility. If you would invest 8,399 in Boston Scientific Corp on August 31, 2024 and sell it today you would earn a total of 676.00 from holding Boston Scientific Corp or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Boston Scientific Corp
Performance |
| Timeline |
| Pfizer Inc |
| Boston Scientific Corp |
Pfizer and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Boston Scientific
The main advantage of trading using opposite Pfizer and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer 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.| Pfizer vs. Johnson Johnson | Pfizer vs. RLJ Lodging Trust | Pfizer vs. Aquagold International | Pfizer vs. Stepstone Group |
| Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. Edwards Lifesciences Corp | Boston Scientific vs. ZimVie 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |