Correlation Between Siemens Healthineers and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers 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 Siemens Healthineers and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Healthineers AG and Boston Scientific, you can compare the effects of market volatilities on Siemens Healthineers 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 Siemens Healthineers with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Boston Scientific.
Diversification Opportunities for Siemens Healthineers and Boston Scientific
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siemens and Boston is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Boston Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific and Siemens Healthineers 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 Siemens Healthineers AG 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 has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Boston Scientific go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Boston Scientific
Assuming the 90 days trading horizon Siemens Healthineers is expected to generate 4.17 times less return on investment than Boston Scientific. But when comparing it to its historical volatility, Siemens Healthineers AG is 1.02 times less risky than Boston Scientific. It trades about 0.02 of its potential returns per unit of risk. Boston Scientific is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,309 in Boston Scientific on September 25, 2024 and sell it today you would earn a total of 4,191 from holding Boston Scientific or generate 97.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Boston Scientific
Performance |
| Timeline |
| Siemens Healthineers |
| Boston Scientific |
Siemens Healthineers and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Boston Scientific
The main advantage of trading using opposite Siemens Healthineers and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers 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.| Siemens Healthineers vs. Abbott Laboratories | Siemens Healthineers vs. Medtronic PLC | Siemens Healthineers vs. Stryker | Siemens Healthineers vs. Boston Scientific |
| Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. Stryker | Boston Scientific vs. Siemens Healthineers AG |
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 Positions Ratings module to 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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |