Correlation Between ENTREPARTICULIERS and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both ENTREPARTICULIERS 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 ENTREPARTICULIERS and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENTREPARTICULIERS EO 10 and Edwards Lifesciences, you can compare the effects of market volatilities on ENTREPARTICULIERS 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 ENTREPARTICULIERS with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTREPARTICULIERS and Edwards Lifesciences.
Diversification Opportunities for ENTREPARTICULIERS and Edwards Lifesciences
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ENTREPARTICULIERS and Edwards is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ENTREPARTICULIERS EO 10 and Edwards Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences and ENTREPARTICULIERS 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 ENTREPARTICULIERS EO 10 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 ENTREPARTICULIERS i.e., ENTREPARTICULIERS and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between ENTREPARTICULIERS and Edwards Lifesciences
Assuming the 90 days horizon ENTREPARTICULIERS EO 10 is expected to generate 7.21 times more return on investment than Edwards Lifesciences. However, ENTREPARTICULIERS is 7.21 times more volatile than Edwards Lifesciences. It trades about 0.1 of its potential returns per unit of risk. Edwards Lifesciences is currently generating about 0.17 per unit of risk. If you would invest 40.00 in ENTREPARTICULIERS EO 10 on November 27, 2024 and sell it today you would earn a total of 5.00 from holding ENTREPARTICULIERS EO 10 or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENTREPARTICULIERS EO 10 vs. Edwards Lifesciences
Performance |
| Timeline |
| ENTREPARTICULIERS EO |
| Edwards Lifesciences |
ENTREPARTICULIERS and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTREPARTICULIERS and Edwards Lifesciences
The main advantage of trading using opposite ENTREPARTICULIERS and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTREPARTICULIERS 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.| ENTREPARTICULIERS vs. FLOW TRADERS LTD | ENTREPARTICULIERS vs. Nordic Semiconductor ASA | ENTREPARTICULIERS vs. TOREX SEMICONDUCTOR LTD | ENTREPARTICULIERS vs. MARKET VECTR RETAIL |
| Edwards Lifesciences vs. GRUPO CARSO A1 | Edwards Lifesciences vs. Direct Line Insurance | Edwards Lifesciences vs. CREDIT AGRICOLE | Edwards Lifesciences vs. Chiba Bank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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