Correlation Between DIH Holding and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both DIH Holding 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 DIH Holding and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIH Holding US, and Edwards Lifesciences Corp, you can compare the effects of market volatilities on DIH Holding 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 DIH Holding with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIH Holding and Edwards Lifesciences.
Diversification Opportunities for DIH Holding and Edwards Lifesciences
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DIH and Edwards is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DIH Holding US, 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 DIH Holding 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 DIH Holding US, 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 DIH Holding i.e., DIH Holding and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between DIH Holding and Edwards Lifesciences
Assuming the 90 days horizon DIH Holding US, is expected to generate 18.08 times more return on investment than Edwards Lifesciences. However, DIH Holding is 18.08 times more volatile than Edwards Lifesciences Corp. It trades about -0.01 of its potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about -0.33 per unit of risk. If you would invest 5.00 in DIH Holding US, on October 24, 2024 and sell it today you would lose (1.69) from holding DIH Holding US, or give up 33.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIH Holding US, vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| DIH Holding US, |
| Edwards Lifesciences Corp |
DIH Holding and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIH Holding and Edwards Lifesciences
The main advantage of trading using opposite DIH Holding and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIH Holding 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.| DIH Holding vs. Viemed Healthcare | DIH Holding vs. Neogen | DIH Holding vs. Precision Drilling | DIH Holding vs. Nabors Industries |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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