Correlation Between Aethlon Medical and Boston Scientific

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

Diversification Opportunities for Aethlon Medical and Boston Scientific

-0.21

Correlation Coefficient

Aethlon Medical  Boston Scientific

Very good diversification

The 3 months correlation between Aethlon and Boston is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon 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 Aethlon 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 Aethlon 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 Aethlon Medical i.e., Aethlon Medical and Boston Scientific go up and down completely randomly.

Pair Corralation between Aethlon Medical and Boston Scientific

Given the investment horizon of 90 days Aethlon Medical is expected to generate 10.97 times more return on investment than Boston Scientific. However, Aethlon Medical is 10.97 times more volatile than Boston Scientific Corp. It trades about 0.05 of its potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.09 per unit of risk. If you would invest  42.00  in Aethlon Medical on September 21, 2024 and sell it today you would earn a total of  1.00  from holding Aethlon Medical or generate 2.38% return on investment over 90 days.

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

Aethlon Medical  vs.  Boston Scientific Corp

Aethlon Medical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Aethlon Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Boston Scientific Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 6 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aethlon Medical and Boston Scientific

The main advantage of trading using opposite Aethlon Medical and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aethlon 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.

The idea behind Aethlon Medical and Boston Scientific Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.