Correlation Between Boston Scientific and Echo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Echo Therapeutics 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 Boston Scientific and Echo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Scientific Corp and Echo Therapeutics, you can compare the effects of market volatilities on Boston Scientific and Echo Therapeutics 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 Boston Scientific with a short position of Echo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Echo Therapeutics.
Diversification Opportunities for Boston Scientific and Echo Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Echo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Echo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Therapeutics and Boston Scientific 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 Boston Scientific Corp are associated (or correlated) with Echo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Therapeutics has no effect on the direction of Boston Scientific i.e., Boston Scientific and Echo Therapeutics go up and down completely randomly.
Pair Corralation between Boston Scientific and Echo Therapeutics
If you would invest 6,083 in Boston Scientific Corp on January 25, 2024 and sell it today you would earn a total of 816.00 from holding Boston Scientific Corp or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. Echo Therapeutics
Performance |
| Timeline |
| Boston Scientific Corp |
| Echo Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boston Scientific and Echo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Echo Therapeutics
The main advantage of trading using opposite Boston Scientific and Echo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Echo Therapeutics 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 Echo Therapeutics will offset losses from the drop in Echo Therapeutics' long position.| Boston Scientific vs. HealthStream | Boston Scientific vs. National Research Corp | Boston Scientific vs. HealthEquity | Boston Scientific vs. Health Catalyst |
| Echo Therapeutics vs. Eterna Therapeutics | Echo Therapeutics vs. Acumen Pharmaceuticals | Echo Therapeutics vs. Catalyst Pharmaceuticals | Echo Therapeutics vs. Tarsus PharmaceuticalsInc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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