Correlation Between Thermo Fisher and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher 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 Thermo Fisher and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermo Fisher Scientific and Boston Scientific Corp, you can compare the effects of market volatilities on Thermo Fisher 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 Thermo Fisher with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Boston Scientific.
Diversification Opportunities for Thermo Fisher and Boston Scientific
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thermo and Boston is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific 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 Thermo Fisher 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 Thermo Fisher Scientific 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 Thermo Fisher i.e., Thermo Fisher and Boston Scientific go up and down completely randomly.
Pair Corralation between Thermo Fisher and Boston Scientific
Considering the 90-day investment horizon Thermo Fisher Scientific is expected to under-perform the Boston Scientific. In addition to that, Thermo Fisher is 1.09 times more volatile than Boston Scientific Corp. It trades about -0.02 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.19 per unit of volatility. If you would invest 6,813 in Boston Scientific Corp on February 3, 2024 and sell it today you would earn a total of 390.00 from holding Boston Scientific Corp or generate 5.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thermo Fisher Scientific vs. Boston Scientific Corp
Performance |
Timeline |
Thermo Fisher Scientific |
Boston Scientific Corp |
Thermo Fisher and Boston Scientific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thermo Fisher and Boston Scientific
The main advantage of trading using opposite Thermo Fisher and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher 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 Thermo Fisher Scientific 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.Boston Scientific vs. Stryker | Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. DexCom Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |