Correlation Between Shockwave Medical and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Shockwave Medical 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 Shockwave Medical and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shockwave Medical and Boston Scientific Corp, you can compare the effects of market volatilities on Shockwave Medical 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 Shockwave Medical with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shockwave Medical and Boston Scientific.
Diversification Opportunities for Shockwave Medical and Boston Scientific
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shockwave and Boston is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shockwave Medical 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 Shockwave Medical 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 Shockwave Medical 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 Shockwave Medical i.e., Shockwave Medical and Boston Scientific go up and down completely randomly.
Pair Corralation between Shockwave Medical and Boston Scientific
Given the investment horizon of 90 days Shockwave Medical is expected to generate 5.89 times less return on investment than Boston Scientific. In addition to that, Shockwave Medical is 2.51 times more volatile than Boston Scientific Corp. It trades about 0.01 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.13 per unit of volatility. If you would invest 4,196 in Boston Scientific Corp on July 27, 2024 and sell it today you would earn a total of 4,314 from holding Boston Scientific Corp or generate 102.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 36.03% |
Values | Daily Returns |
Shockwave Medical vs. Boston Scientific Corp
Performance |
Timeline |
Shockwave Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boston Scientific Corp |
Shockwave Medical and Boston Scientific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shockwave Medical and Boston Scientific
The main advantage of trading using opposite Shockwave Medical and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shockwave Medical 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.Shockwave Medical vs. Inari Medical | Shockwave Medical vs. Outset Medical | Shockwave Medical vs. Clearpoint Neuro | Shockwave Medical vs. Inspire Medical Systems |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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