Correlation Between Edwards Lifesciences and Health Catalyst
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Health Catalyst 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 Health Catalyst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edwards Lifesciences Corp and Health Catalyst, you can compare the effects of market volatilities on Edwards Lifesciences and Health Catalyst 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 Health Catalyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Health Catalyst.
Diversification Opportunities for Edwards Lifesciences and Health Catalyst
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edwards and Health is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Health Catalyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Catalyst 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 Corp are associated (or correlated) with Health Catalyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Catalyst has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Health Catalyst go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Health Catalyst
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to generate 0.31 times more return on investment than Health Catalyst. However, Edwards Lifesciences Corp is 3.18 times less risky than Health Catalyst. It trades about -0.25 of its potential returns per unit of risk. Health Catalyst is currently generating about -0.31 per unit of risk. If you would invest 7,393 in Edwards Lifesciences Corp on October 20, 2024 and sell it today you would lose (415.00) from holding Edwards Lifesciences Corp or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Health Catalyst
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Health Catalyst |
Edwards Lifesciences and Health Catalyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Health Catalyst
The main advantage of trading using opposite Edwards Lifesciences and Health Catalyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Health Catalyst 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 Health Catalyst will offset losses from the drop in Health Catalyst's long position.| Edwards Lifesciences vs. Odyssey Group International | Edwards Lifesciences vs. Forza Innovations | Edwards Lifesciences vs. Bioelectronics Corp | Edwards Lifesciences vs. Myomo Inc |
| Health Catalyst vs. National Research Corp | Health Catalyst vs. Certara | Health Catalyst vs. HealthStream | Health Catalyst vs. Forian Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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