Correlation Between Zegona Communications and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Zegona Communications 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 Zegona Communications and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and Boston Scientific Corp, you can compare the effects of market volatilities on Zegona Communications 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 Zegona Communications with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Boston Scientific.
Diversification Opportunities for Zegona Communications and Boston Scientific
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zegona and Boston is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications 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 Zegona Communications 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 Zegona Communications 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 Zegona Communications i.e., Zegona Communications and Boston Scientific go up and down completely randomly.
Pair Corralation between Zegona Communications and Boston Scientific
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 3.57 times more return on investment than Boston Scientific. However, Zegona Communications is 3.57 times more volatile than Boston Scientific Corp. It trades about 0.28 of its potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.26 per unit of risk. If you would invest 32,400 in Zegona Communications Plc on October 12, 2024 and sell it today you would earn a total of 9,200 from holding Zegona Communications Plc or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. Boston Scientific Corp
Performance |
| Timeline |
| Zegona Communications Plc |
| Boston Scientific Corp |
Zegona Communications and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Boston Scientific
The main advantage of trading using opposite Zegona Communications and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications 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.| Zegona Communications vs. Hilton Food Group | Zegona Communications vs. Roebuck Food Group | Zegona Communications vs. Summit Materials Cl | Zegona Communications vs. Morgan Advanced Materials |
| Boston Scientific vs. Wheaton Precious Metals | Boston Scientific vs. Zegona Communications Plc | Boston Scientific vs. Lundin Mining Corp | Boston Scientific vs. Metals Exploration Plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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