Correlation Between Edwards Lifesciences and Si Bone
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Si Bone 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 Si Bone 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 Si Bone, you can compare the effects of market volatilities on Edwards Lifesciences and Si Bone 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 Si Bone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Si Bone.
Diversification Opportunities for Edwards Lifesciences and Si Bone
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edwards and SIBN is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone 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 Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Si Bone go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Si Bone
Allowing for the 90-day total investment horizon Edwards Lifesciences is expected to generate 2.86 times less return on investment than Si Bone. But when comparing it to its historical volatility, Edwards Lifesciences Corp is 1.41 times less risky than Si Bone. It trades about 0.01 of its potential returns per unit of risk. Si Bone is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,182 in Si Bone on September 13, 2024 and sell it today you would earn a total of 179.00 from holding Si Bone or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Si Bone
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Si Bone |
Edwards Lifesciences and Si Bone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Si Bone
The main advantage of trading using opposite Edwards Lifesciences and Si Bone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Si Bone 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 Si Bone will offset losses from the drop in Si Bone's long position.| Edwards Lifesciences vs. Avita Medical | Edwards Lifesciences vs. Sight Sciences | Edwards Lifesciences vs. Treace Medical Concepts | Edwards Lifesciences vs. Neuropace |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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