Correlation Between Saputo and Becton Dickinson

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Can any of the company-specific risk be diversified away by investing in both Saputo and Becton Dickinson 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 Saputo and Becton Dickinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saputo Inc and Becton Dickinson And, you can compare the effects of market volatilities on Saputo and Becton Dickinson 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 Saputo with a short position of Becton Dickinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saputo and Becton Dickinson.

Diversification Opportunities for Saputo and Becton Dickinson

  Correlation Coefficient

Poor diversification

The 3 months correlation between Saputo and Becton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Saputo Inc and Becton Dickinson And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson And and Saputo 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 Saputo Inc are associated (or correlated) with Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson And has no effect on the direction of Saputo i.e., Saputo and Becton Dickinson go up and down completely randomly.

Pair Corralation between Saputo and Becton Dickinson

Assuming the 90 days horizon Saputo Inc is expected to generate 0.6 times more return on investment than Becton Dickinson. However, Saputo Inc is 1.67 times less risky than Becton Dickinson. It trades about 0.2 of its potential returns per unit of risk. Becton Dickinson And is currently generating about 0.08 per unit of risk. If you would invest  2,443  in Saputo Inc on August 28, 2022 and sell it today you would earn a total of  122.00  from holding Saputo Inc or generate 4.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Saputo Inc  vs.  Becton Dickinson And

 Performance (%) 
Saputo Inc 
Saputo Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Saputo Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Saputo is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Saputo Price Channel

Becton Dickinson And 
Becton Performance
0 of 100
Over the last 90 days Becton Dickinson And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Becton Dickinson is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Becton Price Channel

Saputo and Becton Dickinson Volatility Contrast

   Predicted Return Density   

Pair Trading with Saputo and Becton Dickinson

The main advantage of trading using opposite Saputo and Becton Dickinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saputo position performs unexpectedly, Becton Dickinson 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 Becton Dickinson will offset losses from the drop in Becton Dickinson's long position.
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The idea behind Saputo Inc and Becton Dickinson And 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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Check out your portfolio center. 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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