Correlation Between Edwards Lifesciences and SPY

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and SPY 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 SPY 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 SPY Inc, you can compare the effects of market volatilities on Edwards Lifesciences and SPY 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 SPY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and SPY.

Diversification Opportunities for Edwards Lifesciences and SPY

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Edwards and SPY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and SPY Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPY Inc 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 SPY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPY Inc has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and SPY go up and down completely randomly.

Pair Corralation between Edwards Lifesciences and SPY

If you would invest  8,690  in Edwards Lifesciences Corp on December 20, 2023 and sell it today you would earn a total of  595.00  from holding Edwards Lifesciences Corp or generate 6.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Edwards Lifesciences Corp  vs.  SPY Inc

 Performance 
       Timeline  
Edwards Lifesciences Corp 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Edwards Lifesciences Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Edwards Lifesciences showed solid returns over the last few months and may actually be approaching a breakup point.
SPY Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days SPY Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SPY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Edwards Lifesciences and SPY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Edwards Lifesciences and SPY

The main advantage of trading using opposite Edwards Lifesciences and SPY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, SPY 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 SPY will offset losses from the drop in SPY's long position.
The idea behind Edwards Lifesciences Corp and SPY 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities