Correlation Between Edwards Lifesciences and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and ProShares UltraShort 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 Edwards Lifesciences and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edwards Lifesciences Corp and ProShares UltraShort Bloomberg, you can compare the effects of market volatilities on Edwards Lifesciences and ProShares UltraShort 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 Edwards Lifesciences with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and ProShares UltraShort.
Diversification Opportunities for Edwards Lifesciences and ProShares UltraShort
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edwards and ProShares is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Edwards 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 Edwards Lifesciences Corp are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and ProShares UltraShort
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to under-perform the ProShares UltraShort. But the stock apears to be less risky and, when comparing its historical volatility, Edwards Lifesciences Corp is 1.27 times less risky than ProShares UltraShort. The stock trades about -0.3 of its potential returns per unit of risk. The ProShares UltraShort Bloomberg is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 1,629 in ProShares UltraShort Bloomberg on January 27, 2024 and sell it today you would lose (88.00) from holding ProShares UltraShort Bloomberg or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. ProShares UltraShort Bloomberg
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| ProShares UltraShort |
Edwards Lifesciences and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and ProShares UltraShort
The main advantage of trading using opposite Edwards Lifesciences and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Edwards Lifesciences vs. Medtronic PLC | Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. Zimmer Biomet Holdings |
| ProShares UltraShort vs. ProShares Ultra Bloomberg | ProShares UltraShort vs. Direxion Daily Semiconductor | ProShares UltraShort vs. MicroSectors Big Oil | ProShares UltraShort vs. Direxion Daily SP |
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 the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stocks Directory Find actively traded stocks across global markets |