Correlation Between Edwards Lifesciences and Shockwave Medical
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Shockwave Medical 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 Shockwave Medical 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 Shockwave Medical, you can compare the effects of market volatilities on Edwards Lifesciences and Shockwave Medical 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 Shockwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Shockwave Medical.
Diversification Opportunities for Edwards Lifesciences and Shockwave Medical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Edwards and Shockwave is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Shockwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shockwave Medical 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 Shockwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shockwave Medical has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Shockwave Medical go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Shockwave Medical
If you would invest 6,852 in Edwards Lifesciences Corp on August 28, 2024 and sell it today you would earn a total of 275.00 from holding Edwards Lifesciences Corp or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Shockwave Medical
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Shockwave Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Edwards Lifesciences and Shockwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Shockwave Medical
The main advantage of trading using opposite Edwards Lifesciences and Shockwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Shockwave Medical 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 Shockwave Medical will offset losses from the drop in Shockwave Medical'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 |
| Shockwave Medical vs. Inari Medical | Shockwave Medical vs. Outset Medical | Shockwave Medical vs. Clearpoint Neuro | Shockwave Medical vs. Inspire Medical Systems |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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