Correlation Between Boston Scientific and Vycor Medical

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

Diversification Opportunities for Boston Scientific and Vycor Medical

0.17

Correlation Coefficient

Boston Scientific  Vycor Medical

Average diversification

The 3 months correlation between Boston and Vycor is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Vycor Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vycor 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 Vycor Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vycor Medical has no effect on the direction of Boston Scientific i.e., Boston Scientific and Vycor Medical go up and down completely randomly.

Pair Corralation between Boston Scientific and Vycor Medical

Considering the 90-day investment horizon Boston Scientific is expected to generate 2.62 times less return on investment than Vycor Medical. But when comparing it to its historical volatility, Boston Scientific Corp is 9.13 times less risky than Vycor Medical. It trades about 0.11 of its potential returns per unit of risk. Vycor Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8.90  in Vycor Medical on September 21, 2024 and sell it today you would lose (2.00) from holding Vycor Medical or give up 22.47% of portfolio value over 90 days.

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

Boston Scientific Corp  vs.  Vycor Medical

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.

Vycor Medical

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Boston Scientific and Vycor Medical

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

The idea behind Boston Scientific Corp and Vycor 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.