Correlation Between Boston Scientific and Rewalk Robotics

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

Diversification Opportunities for Boston Scientific and Rewalk Robotics

0.46

Correlation Coefficient

Boston Scientific  Rewalk Robotics

Very weak diversification

The 3 months correlation between Boston and Rewalk is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Rewalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rewalk Robotics 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 Rewalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rewalk Robotics has no effect on the direction of Boston Scientific i.e., Boston Scientific and Rewalk Robotics go up and down completely randomly.

Pair Corralation between Boston Scientific and Rewalk Robotics

If you would invest  8,400  in Boston Scientific Corp on September 21, 2024 and sell it today you would earn a total of  466.00  from holding Boston Scientific Corp or generate 5.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Boston Scientific Corp  vs.  Rewalk Robotics

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.

Rewalk Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rewalk Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Rewalk Robotics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Boston Scientific and Rewalk Robotics

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

The idea behind Boston Scientific Corp and Rewalk Robotics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.