Correlation Between Edwards Lifesciences and First Majestic
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and First Majestic 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 First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edwards Lifesciences and First Majestic Silver, you can compare the effects of market volatilities on Edwards Lifesciences and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and First Majestic.
Diversification Opportunities for Edwards Lifesciences and First Majestic
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edwards and First is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and First Majestic go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and First Majestic
Assuming the 90 days horizon Edwards Lifesciences is expected to under-perform the First Majestic. But the stock apears to be less risky and, when comparing its historical volatility, Edwards Lifesciences is 1.58 times less risky than First Majestic. The stock trades about -0.42 of its potential returns per unit of risk. The First Majestic Silver is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 46,105 in First Majestic Silver on November 1, 2024 and sell it today you would earn a total of 2,873 from holding First Majestic Silver or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences vs. First Majestic Silver
Performance |
| Timeline |
| Edwards Lifesciences |
| First Majestic Silver |
Edwards Lifesciences and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and First Majestic
The main advantage of trading using opposite Edwards Lifesciences and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Edwards Lifesciences vs. First Majestic Silver | Edwards Lifesciences vs. Prudential Financial | Edwards Lifesciences vs. The Home Depot | Edwards Lifesciences vs. Grupo Sports World |
| First Majestic vs. Verizon Communications | First Majestic vs. Costco Wholesale | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. Deutsche Bank Aktiengesellschaft |
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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