Correlation Between Edwards Lifesciences and Electromed
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Electromed 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 Electromed 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 Electromed, you can compare the effects of market volatilities on Edwards Lifesciences and Electromed 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 Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Electromed.
Diversification Opportunities for Edwards Lifesciences and Electromed
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Edwards and Electromed is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed 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 Electromed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromed has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Electromed go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Electromed
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to generate 0.86 times more return on investment than Electromed. However, Edwards Lifesciences Corp is 1.16 times less risky than Electromed. It trades about -0.26 of its potential returns per unit of risk. Electromed is currently generating about -0.73 per unit of risk. If you would invest 9,304 in Edwards Lifesciences Corp on January 20, 2024 and sell it today you would lose (659.00) from holding Edwards Lifesciences Corp or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Electromed
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Electromed |
Edwards Lifesciences and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Electromed
The main advantage of trading using opposite Edwards Lifesciences and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Electromed 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 Electromed will offset losses from the drop in Electromed's long position.| Edwards Lifesciences vs. Agilent Technologies | Edwards Lifesciences vs. Illumina | Edwards Lifesciences vs. Waters | Edwards Lifesciences vs. Thermo Fisher Scientific |
| Electromed vs. Agilent Technologies | Electromed vs. Illumina | Electromed vs. Waters | Electromed 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| 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 Center All portfolio management and optimization tools to improve performance of your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |