Correlation Between Broadridge Financial and Boston Scientific

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

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

Diversification Opportunities for Broadridge Financial and Boston Scientific

0.92

Correlation Coefficient

Broadridge Financial  Boston Scientific

Almost no diversification

The 3 months correlation between Broadridge and Boston is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions 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 Broadridge Financial 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 Broadridge Financial Solutions 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 Broadridge Financial i.e., Broadridge Financial and Boston Scientific go up and down completely randomly.

Pair Corralation between Broadridge Financial and Boston Scientific

Assuming the 90 days trading horizon Broadridge Financial Solutions is expected to generate 1.28 times more return on investment than Boston Scientific. However, Broadridge Financial is 1.28 times more volatile than Boston Scientific Corp. It trades about -0.05 of its potential returns per unit of risk. Boston Scientific Corp is currently generating about -0.14 per unit of risk. If you would invest  22,694  in Broadridge Financial Solutions on September 22, 2024 and sell it today you would lose (274.00) from holding Broadridge Financial Solutions or give up 1.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.65%
Values	Daily Returns

Broadridge Financial Solutions  vs.  Boston Scientific Corp

Broadridge Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 stable basic indicators, Boston Scientific is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Broadridge Financial and Boston Scientific

The main advantage of trading using opposite Broadridge Financial and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadridge Financial 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.

The idea behind Broadridge Financial Solutions and Boston Scientific Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.