Correlation Between Becton Dickinson and ResMed

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

By analyzing existing cross correlation between Becton Dickinson and and ResMed Inc, you can compare the effects of market volatilities on Becton Dickinson and ResMed 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 Becton Dickinson with a short position of ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and ResMed.

Diversification Opportunities for Becton Dickinson and ResMed

-0.8

Correlation Coefficient

Becton Dickinson  ResMed

Pay attention - limited upside

The 3 months correlation between Becton and ResMed is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc and Becton Dickinson 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 Becton Dickinson and are associated (or correlated) with ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Becton Dickinson i.e., Becton Dickinson and ResMed go up and down completely randomly.

Pair Corralation between Becton Dickinson and ResMed

Assuming the 90 days horizon Becton Dickinson and is expected to under-perform the ResMed. In addition to that, Becton Dickinson is 1.75 times more volatile than ResMed Inc. It trades about -0.05 of its total potential returns per unit of risk. ResMed Inc is currently generating about 0.19 per unit of volatility. If you would invest  18,501  in ResMed Inc on April 19, 2025 and sell it today you would earn a total of  3,279  from holding ResMed Inc or generate 17.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Becton Dickinson and  vs.  ResMed Inc

Becton Dickinson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Becton Dickinson and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ResMed Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ResMed Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ResMed reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Becton Dickinson and ResMed

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

The idea behind Becton Dickinson and and ResMed Inc 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 Stocks Directory module to find actively traded stocks across global markets.