Correlation Between Paragon 28 and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Paragon 28 and Edwards Lifesciences 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 Paragon 28 and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Paragon 28 and Edwards Lifesciences 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 Paragon 28 with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Edwards Lifesciences.
Diversification Opportunities for Paragon 28 and Edwards Lifesciences
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Paragon and Edwards is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Edwards Lifesciences Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences Corp and Paragon 28 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 Paragon 28 are associated (or correlated) with Edwards Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edwards Lifesciences Corp has no effect on the direction of Paragon 28 i.e., Paragon 28 and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Paragon 28 and Edwards Lifesciences
Considering the 90-day investment horizon Paragon 28 is expected to under-perform the Edwards Lifesciences. In addition to that, Paragon 28 is 1.91 times more volatile than Edwards Lifesciences Corp. It trades about -0.01 of its total potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about 0.01 per unit of volatility. If you would invest 7,596 in Edwards Lifesciences Corp on September 3, 2024 and sell it today you would lose (461.00) from holding Edwards Lifesciences Corp or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paragon 28 vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Paragon 28 |
| Edwards Lifesciences Corp |
Paragon 28 and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon 28 and Edwards Lifesciences
The main advantage of trading using opposite Paragon 28 and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, Edwards Lifesciences 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 Edwards Lifesciences will offset losses from the drop in Edwards Lifesciences' long position.| Paragon 28 vs. Tandem Diabetes Care | Paragon 28 vs. Inspire Medical Systems | Paragon 28 vs. Penumbra | Paragon 28 vs. Insulet |
| Edwards Lifesciences vs. Tandem Diabetes Care | Edwards Lifesciences vs. Inspire Medical Systems | Edwards Lifesciences vs. Penumbra | Edwards Lifesciences 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |