Correlation Between Varian Medical and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Varian Medical 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 Varian Medical and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varian Medical Systems and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Varian Medical 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 Varian Medical with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varian Medical and Edwards Lifesciences.
Diversification Opportunities for Varian Medical and Edwards Lifesciences
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Varian and Edwards is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Varian Medical Systems 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 Varian Medical 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 Varian Medical Systems 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 Varian Medical i.e., Varian Medical and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Varian Medical and Edwards Lifesciences
If you would invest (100.00) in Varian Medical Systems on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Varian Medical Systems or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Varian Medical Systems vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Varian Medical Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Edwards Lifesciences Corp |
Varian Medical and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varian Medical and Edwards Lifesciences
The main advantage of trading using opposite Varian Medical and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varian Medical 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.| Varian Medical vs. Evolution Gaming Group | Varian Medical vs. Amgen Inc | Varian Medical vs. Omni Health | Varian Medical vs. Playstudios |
| Edwards Lifesciences vs. Agilent Technologies | Edwards Lifesciences vs. Illumina | Edwards Lifesciences vs. Waters | Edwards Lifesciences vs. Thermo Fisher Scientific |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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