Correlation Between Edwards Lifesciences and LENSAR
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and LENSAR 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 LENSAR 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 LENSAR Inc, you can compare the effects of market volatilities on Edwards Lifesciences and LENSAR 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 LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and LENSAR.
Diversification Opportunities for Edwards Lifesciences and LENSAR
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Edwards and LENSAR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc 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 LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and LENSAR go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and LENSAR
Allowing for the 90-day total investment horizon Edwards Lifesciences is expected to generate 6.56 times less return on investment than LENSAR. But when comparing it to its historical volatility, Edwards Lifesciences Corp is 3.34 times less risky than LENSAR. It trades about 0.13 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 458.00 in LENSAR Inc on August 29, 2024 and sell it today you would earn a total of 302.50 from holding LENSAR Inc or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. LENSAR Inc
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| LENSAR Inc |
Edwards Lifesciences and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and LENSAR
The main advantage of trading using opposite Edwards Lifesciences and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, LENSAR 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 LENSAR will offset losses from the drop in LENSAR'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 |
| LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. Outset Medical | LENSAR vs. Venus Concept | LENSAR vs. DexCom 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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