Correlation Between GOODTECH ASA and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA 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 GOODTECH ASA and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODTECH ASA A and Edwards Lifesciences, you can compare the effects of market volatilities on GOODTECH ASA 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 GOODTECH ASA with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Edwards Lifesciences.
Diversification Opportunities for GOODTECH ASA and Edwards Lifesciences
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOODTECH and Edwards is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and Edwards Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences and GOODTECH ASA 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 GOODTECH ASA A 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 has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between GOODTECH ASA and Edwards Lifesciences
Assuming the 90 days horizon GOODTECH ASA A is expected to under-perform the Edwards Lifesciences. In addition to that, GOODTECH ASA is 1.25 times more volatile than Edwards Lifesciences. It trades about -0.11 of its total potential returns per unit of risk. Edwards Lifesciences is currently generating about 0.25 per unit of volatility. If you would invest 6,265 in Edwards Lifesciences on September 1, 2024 and sell it today you would earn a total of 523.00 from holding Edwards Lifesciences or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODTECH ASA A vs. Edwards Lifesciences
Performance |
| Timeline |
| GOODTECH ASA A |
| Edwards Lifesciences |
GOODTECH ASA and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODTECH ASA and Edwards Lifesciences
The main advantage of trading using opposite GOODTECH ASA and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA 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.| GOODTECH ASA vs. IMAGIN MEDICAL INC | GOODTECH ASA vs. ULTRA CLEAN HLDGS | GOODTECH ASA vs. PLAYSTUDIOS A DL 0001 | GOODTECH ASA vs. Apollo Medical Holdings |
| Edwards Lifesciences vs. SPORT LISBOA E | Edwards Lifesciences vs. Columbia Sportswear | Edwards Lifesciences vs. Air Transport Services | Edwards Lifesciences vs. Mitsubishi Gas Chemical |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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