Correlation Between Roebuck Food and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Boston Scientific Corp, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Boston Scientific.
Diversification Opportunities for Roebuck Food and Boston Scientific
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Roebuck and Boston is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group 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 Roebuck Food 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 Roebuck Food Group 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 Roebuck Food i.e., Roebuck Food and Boston Scientific go up and down completely randomly.
Pair Corralation between Roebuck Food and Boston Scientific
Assuming the 90 days trading horizon Roebuck Food is expected to generate 3.96 times less return on investment than Boston Scientific. In addition to that, Roebuck Food is 1.52 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 0.14 per unit of volatility. If you would invest 4,734 in Boston Scientific Corp on November 6, 2024 and sell it today you would earn a total of 5,632 from holding Boston Scientific Corp or generate 118.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Roebuck Food Group vs. Boston Scientific Corp
Performance |
| Timeline |
| Roebuck Food Group |
| Boston Scientific Corp |
Roebuck Food and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Boston Scientific
The main advantage of trading using opposite Roebuck Food and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Applied Materials | Roebuck Food vs. Impax Asset Management | Roebuck Food vs. Batm Advanced Communications | Roebuck Food vs. Cairo Communication SpA |
| Boston Scientific vs. Samsung Electronics Co | Boston Scientific vs. Samsung Electronics Co | Boston Scientific vs. Toyota Motor Corp | Boston Scientific vs. Reliance Industries Ltd |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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