Correlation Between CAP LEASE and Boston Scientific

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

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

Diversification Opportunities for CAP LEASE and Boston Scientific

-0.74

Correlation Coefficient

CAP LEASE  Boston Scientific

Pay attention - limited upside

The 3 months correlation between CAP and Boston is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION 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 CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Boston Scientific go up and down completely randomly.

Pair Corralation between CAP LEASE and Boston Scientific

Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Boston Scientific. In addition to that, CAP LEASE is 2.21 times more volatile than Boston Scientific Corp. It trades about -0.16 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.09 per unit of volatility. If you would invest  8,393  in Boston Scientific Corp on September 22, 2024 and sell it today you would earn a total of  524.00  from holding Boston Scientific Corp or generate 6.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

CAP LEASE AVIATION  vs.  Boston Scientific Corp

CAP LEASE AVIATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 CAP LEASE and Boston Scientific

The main advantage of trading using opposite CAP LEASE and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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 CAP LEASE AVIATION 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..