Correlation Between Boston Scientific and 3I Group
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and 3I Group 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 3I Group 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 3I Group PLC, you can compare the effects of market volatilities on Boston Scientific and 3I Group 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 3I Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and 3I Group.
Diversification Opportunities for Boston Scientific and 3I Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and III is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and 3I Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3I Group PLC 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 3I Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3I Group PLC has no effect on the direction of Boston Scientific i.e., Boston Scientific and 3I Group go up and down completely randomly.
Pair Corralation between Boston Scientific and 3I Group
Assuming the 90 days trading horizon Boston Scientific is expected to generate 1.2 times less return on investment than 3I Group. But when comparing it to its historical volatility, Boston Scientific Corp is 1.34 times less risky than 3I Group. It trades about 0.12 of its potential returns per unit of risk. 3I Group PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 297,410 in 3I Group PLC on September 25, 2024 and sell it today you would earn a total of 58,190 from holding 3I Group PLC or generate 19.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.22% |
Values | Daily Returns |
Boston Scientific Corp vs. 3I Group PLC
Performance |
Timeline |
Boston Scientific Corp |
3I Group PLC |
Boston Scientific and 3I Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boston Scientific and 3I Group
The main advantage of trading using opposite Boston Scientific and 3I Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, 3I Group 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 3I Group will offset losses from the drop in 3I Group's long position.Boston Scientific vs. Uniper SE | Boston Scientific vs. Mulberry Group PLC | Boston Scientific vs. London Security Plc | Boston Scientific vs. Triad Group PLC |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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