Correlation Between Axonics Modulation and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Axonics Modulation 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 Axonics Modulation and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axonics Modulation Technologies and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Axonics Modulation 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 Axonics Modulation with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axonics Modulation and Edwards Lifesciences.
Diversification Opportunities for Axonics Modulation and Edwards Lifesciences
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axonics and Edwards is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Axonics Modulation Technologie 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 Axonics Modulation 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 Axonics Modulation Technologies 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 Axonics Modulation i.e., Axonics Modulation and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Axonics Modulation and Edwards Lifesciences
Given the investment horizon of 90 days Axonics Modulation is expected to generate 2.15 times less return on investment than Edwards Lifesciences. But when comparing it to its historical volatility, Axonics Modulation Technologies is 5.82 times less risky than Edwards Lifesciences. It trades about 0.34 of its potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,863 in Edwards Lifesciences Corp on August 31, 2024 and sell it today you would earn a total of 247.50 from holding Edwards Lifesciences Corp or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.52% |
| Values | Daily Returns |
Axonics Modulation Technologie vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Axonics Modulation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Edwards Lifesciences Corp |
Axonics Modulation and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axonics Modulation and Edwards Lifesciences
The main advantage of trading using opposite Axonics Modulation and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axonics Modulation 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.| Axonics Modulation vs. Orthofix Medical | Axonics Modulation vs. Glaukos Corp | Axonics Modulation vs. Bruker | Axonics Modulation vs. Integer Holdings Corp |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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