Correlation Between Haynes International and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Haynes International and Edwards Lifesciences 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 Haynes International and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haynes International and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Haynes International 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 Haynes International with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haynes International and Edwards Lifesciences.
Diversification Opportunities for Haynes International and Edwards Lifesciences
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haynes and Edwards is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Haynes International and Edwards Lifesciences Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences Corp and Haynes International 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 Haynes International 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 Corp has no effect on the direction of Haynes International i.e., Haynes International and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Haynes International and Edwards Lifesciences
Given the investment horizon of 90 days Haynes International is expected to generate 1.13 times more return on investment than Edwards Lifesciences. However, Haynes International is 1.13 times more volatile than Edwards Lifesciences Corp. It trades about 0.07 of its potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about 0.01 per unit of risk. If you would invest 3,432 in Haynes International on January 19, 2024 and sell it today you would earn a total of 2,603 from holding Haynes International or generate 75.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haynes International vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Haynes International |
| Edwards Lifesciences Corp |
Haynes International and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haynes International and Edwards Lifesciences
The main advantage of trading using opposite Haynes International and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haynes International position performs unexpectedly, Edwards Lifesciences 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 Edwards Lifesciences will offset losses from the drop in Edwards Lifesciences' long position.| Haynes International vs. Ampco Pittsburgh | Haynes International vs. ESAB Corp | Haynes International vs. Mayville Engineering Co | Haynes International vs. Mueller Industries |
| Edwards Lifesciences vs. Medtronic PLC | Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. Zimmer Biomet Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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