Pair Correlation Between DOW and Edwards Lifesciences

This module allows you to analyze existing cross correlation between DOW and Edwards Lifesciences Corporation. You can compare the effects of market volatilities on DOW and Edwards Lifesciences 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 DOW with a short position of Edwards Lifesciences. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Edwards Lifesciences.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 DOW  vs   Edwards Lifesciences Corp.
 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.28 times more return on investment than Edwards Lifesciences. However, DOW is 3.58 times less risky than Edwards Lifesciences. It trades about 0.73 of its potential returns per unit of risk. Edwards Lifesciences Corporation is currently generating about 0.11 per unit of risk. If you would invest  2,234,959  in DOW on September 22, 2017 and sell it today you would earn a total of  97,904  from holding DOW or generate 4.38% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and Edwards Lifesciences
0.41

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Diversification

Very weak diversification

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

Comparative Volatility

 Predicted Return Density 
      Returns