Correlation Between Boston Scientific and Boston International

Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Boston International 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 Boston Scientific and Boston International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Scientific Corp and Boston International Holdings, you can compare the effects of market volatilities on Boston Scientific and Boston International 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 Boston Scientific with a short position of Boston International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Boston International.

Diversification Opportunities for Boston Scientific and Boston International

0.0

Correlation Coefficient

Boston Scientific  Boston International

Pay attention - limited upside

The 3 months correlation between Boston and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Boston International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston International and Boston Scientific 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 Boston Scientific Corp are associated (or correlated) with Boston International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston International has no effect on the direction of Boston Scientific i.e., Boston Scientific and Boston International go up and down completely randomly.

Pair Corralation between Boston Scientific and Boston International

If you would invest  4,642  in Boston Scientific Corp on October 4, 2024 and sell it today you would earn a total of  4,305  from holding Boston Scientific Corp or generate 92.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Boston Scientific Corp  vs.  Boston International Holdings

Boston Scientific Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boston Scientific may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Boston International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Boston International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Boston Scientific and Boston International

The main advantage of trading using opposite Boston Scientific and Boston International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Boston International 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 International will offset losses from the drop in Boston International's long position.

The idea behind Boston Scientific Corp and Boston International Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..