Correlation Between Integra LifeSciences and Boston Scientific

Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences 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 Integra LifeSciences and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integra LifeSciences Holdings and Boston Scientific Corp, you can compare the effects of market volatilities on Integra LifeSciences 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 Integra LifeSciences with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Boston Scientific.

Diversification Opportunities for Integra LifeSciences and Boston Scientific

0.77

Correlation Coefficient

Integra LifeSciences  Boston Scientific

Poor diversification

The 3 months correlation between Integra and Boston is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings 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 Integra LifeSciences 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 Integra LifeSciences Holdings 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 Integra LifeSciences i.e., Integra LifeSciences and Boston Scientific go up and down completely randomly.

Pair Corralation between Integra LifeSciences and Boston Scientific

Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to under-perform the Boston Scientific. In addition to that, Integra LifeSciences is 1.96 times more volatile than Boston Scientific Corp. It trades about -0.12 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about -0.13 per unit of volatility. If you would invest  9,150  in Boston Scientific Corp on September 22, 2024 and sell it today you would lose (255.00) from holding Boston Scientific Corp or give up 2.79% of portfolio value over 90 days.

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

Integra LifeSciences Holdings  vs.  Boston Scientific Corp

Integra LifeSciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra LifeSciences Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Integra LifeSciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boston Scientific Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 7 (%) 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 Integra LifeSciences and Boston Scientific

The main advantage of trading using opposite Integra LifeSciences and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences 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 Integra LifeSciences Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.