Correlation Between Boston Scientific and Aethlon Medical

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

Diversification Opportunities for Boston Scientific and Aethlon Medical

0.07

Correlation Coefficient

Boston Scientific  Aethlon Medical

Significant diversification

The 3 months correlation between Boston and Aethlon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical 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 Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Boston Scientific i.e., Boston Scientific and Aethlon Medical go up and down completely randomly.

Pair Corralation between Boston Scientific and Aethlon Medical

Considering the 90-day investment horizon Boston Scientific is expected to generate 7.66 times less return on investment than Aethlon Medical. But when comparing it to its historical volatility, Boston Scientific Corp is 11.53 times less risky than Aethlon Medical. It trades about 0.12 of its potential returns per unit of risk. Aethlon Medical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Aethlon Medical on September 30, 2024 and sell it today you would earn a total of  14.00  from holding Aethlon Medical or generate 29.79% 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.  Aethlon Medical

Boston Scientific Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Boston Scientific may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aethlon Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Aethlon Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Scientific and Aethlon Medical

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

The idea behind Boston Scientific Corp and Aethlon Medical 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.