Correlation Between Boston Scientific and Sanofi ADR

Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Sanofi ADR 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 Sanofi ADR 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 Sanofi ADR, you can compare the effects of market volatilities on Boston Scientific and Sanofi ADR 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 Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Sanofi ADR.

Diversification Opportunities for Boston Scientific and Sanofi ADR

0.13

Correlation Coefficient

Boston Scientific  Sanofi ADR

Average diversification

The 3 months correlation between Boston and Sanofi is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR 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 Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Boston Scientific i.e., Boston Scientific and Sanofi ADR go up and down completely randomly.

Pair Corralation between Boston Scientific and Sanofi ADR

Considering the 90-day investment horizon Boston Scientific Corp is expected to generate 0.66 times more return on investment than Sanofi ADR. However, Boston Scientific Corp is 1.52 times less risky than Sanofi ADR. It trades about 0.03 of its potential returns per unit of risk. Sanofi ADR is currently generating about -0.07 per unit of risk. If you would invest  10,412  in Boston Scientific Corp on May 6, 2025 and sell it today you would earn a total of  213.00  from holding Boston Scientific Corp or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boston Scientific Corp  vs.  Sanofi ADR

Boston Scientific Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Boston Scientific is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sanofi ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sanofi ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Boston Scientific and Sanofi ADR

The main advantage of trading using opposite Boston Scientific and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.

The idea behind Boston Scientific Corp and Sanofi ADR 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.