Correlation Between Becton Dickinson and Scope Metals
Can any of the company-specific risk be diversified away by investing in both Becton Dickinson and Scope Metals 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 Becton Dickinson and Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Becton Dickinson and and Scope Metals Group, you can compare the effects of market volatilities on Becton Dickinson and Scope Metals 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 Becton Dickinson with a short position of Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and Scope Metals.
Diversification Opportunities for Becton Dickinson and Scope Metals
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Becton and Scope is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group and Becton Dickinson 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 Becton Dickinson and are associated (or correlated) with Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Becton Dickinson i.e., Becton Dickinson and Scope Metals go up and down completely randomly.
Pair Corralation between Becton Dickinson and Scope Metals
Considering the 90-day investment horizon Becton Dickinson and is expected to generate 0.58 times more return on investment than Scope Metals. However, Becton Dickinson and is 1.71 times less risky than Scope Metals. It trades about 0.0 of its potential returns per unit of risk. Scope Metals Group is currently generating about -0.01 per unit of risk. If you would invest 24,366 in Becton Dickinson and on January 17, 2024 and sell it today you would lose (894.00) from holding Becton Dickinson and or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 79.07% |
| Values | Daily Returns |
Becton Dickinson and vs. Scope Metals Group
Performance |
| Timeline |
| Becton Dickinson |
| Scope Metals Group |
Becton Dickinson and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becton Dickinson and Scope Metals
The main advantage of trading using opposite Becton Dickinson and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| Becton Dickinson vs. The Ensign Group | Becton Dickinson vs. Select Medical Holdings | Becton Dickinson vs. Encompass Health Corp | Becton Dickinson vs. Enhabit |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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