Correlation Between Edwards Lifesciences and InMode
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and InMode 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 InMode 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 InMode, you can compare the effects of market volatilities on Edwards Lifesciences and InMode 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 InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and InMode.
Diversification Opportunities for Edwards Lifesciences and InMode
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edwards and InMode is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode 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 InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and InMode go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and InMode
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to under-perform the InMode. But the stock apears to be less risky and, when comparing its historical volatility, Edwards Lifesciences Corp is 1.93 times less risky than InMode. The stock trades about 0.0 of its potential returns per unit of risk. The InMode is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,784 in InMode on August 24, 2024 and sell it today you would earn a total of 118.00 from holding InMode or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. InMode
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| InMode |
Edwards Lifesciences and InMode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and InMode
The main advantage of trading using opposite Edwards Lifesciences and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, InMode 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 InMode will offset losses from the drop in InMode's long position.| Edwards Lifesciences vs. Medtronic PLC | Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. Zimmer Biomet Holdings |
| InMode vs. TransMedics Group | InMode vs. Inspire Medical Systems | InMode vs. Inari Medical | InMode vs. Insulet |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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