Correlation Between Edwards Lifesciences and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and SunLink Health 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 SunLink Health 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 SunLink Health Systems, you can compare the effects of market volatilities on Edwards Lifesciences and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and SunLink Health.
Diversification Opportunities for Edwards Lifesciences and SunLink Health
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edwards and SunLink is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and SunLink Health go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and SunLink Health
Allowing for the 90-day total investment horizon Edwards Lifesciences is expected to generate 5.64 times less return on investment than SunLink Health. But when comparing it to its historical volatility, Edwards Lifesciences Corp is 1.93 times less risky than SunLink Health. It trades about 0.01 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 63.00 in SunLink Health Systems on September 25, 2024 and sell it today you would earn a total of 14.00 from holding SunLink Health Systems or generate 22.22% 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. SunLink Health Systems
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| SunLink Health Systems |
Edwards Lifesciences and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and SunLink Health
The main advantage of trading using opposite Edwards Lifesciences and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.| Edwards Lifesciences vs. Cigna Corp | Edwards Lifesciences vs. Definitive Healthcare Corp | Edwards Lifesciences vs. Guardant Health | Edwards Lifesciences vs. Laboratory of |
| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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