Correlation Between Weiss Korea and Boston Scientific

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

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

Diversification Opportunities for Weiss Korea and Boston Scientific

-0.66

Correlation Coefficient

Weiss Korea  Boston Scientific

Excellent diversification

The 3 months correlation between Weiss and Boston is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity 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 Weiss Korea 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 Weiss Korea Opportunity 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 Weiss Korea i.e., Weiss Korea and Boston Scientific go up and down completely randomly.

Pair Corralation between Weiss Korea and Boston Scientific

Assuming the 90 days trading horizon Weiss Korea is expected to generate 12.07 times less return on investment than Boston Scientific. In addition to that, Weiss Korea is 2.5 times more volatile than Boston Scientific Corp. It trades about 0.0 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.12 per unit of volatility. If you would invest  8,542  in Boston Scientific Corp on October 6, 2024 and sell it today you would earn a total of  508.00  from holding Boston Scientific Corp or generate 5.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Weiss Korea Opportunity  vs.  Boston Scientific Corp

Weiss Korea Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weiss Korea Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Weiss Korea is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 unsteady basic indicators, Boston Scientific may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Weiss Korea and Boston Scientific

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

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.