Correlation Between Senseonics Holdings and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Senseonics Holdings 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 Senseonics Holdings and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senseonics Holdings and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Senseonics Holdings 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 Senseonics Holdings with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senseonics Holdings and Edwards Lifesciences.
Diversification Opportunities for Senseonics Holdings and Edwards Lifesciences
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Senseonics and Edwards is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Senseonics Holdings 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 Senseonics Holdings 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 Senseonics Holdings 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 Senseonics Holdings i.e., Senseonics Holdings and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Senseonics Holdings and Edwards Lifesciences
Given the investment horizon of 90 days Senseonics Holdings is expected to under-perform the Edwards Lifesciences. In addition to that, Senseonics Holdings is 2.08 times more volatile than Edwards Lifesciences Corp. It trades about -0.03 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 7,258 in Edwards Lifesciences Corp on August 28, 2024 and sell it today you would lose (131.00) from holding Edwards Lifesciences Corp or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senseonics Holdings vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Senseonics Holdings |
| Edwards Lifesciences Corp |
Senseonics Holdings and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senseonics Holdings and Edwards Lifesciences
The main advantage of trading using opposite Senseonics Holdings and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senseonics Holdings 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.| Senseonics Holdings vs. Insulet | Senseonics Holdings vs. Tandem Diabetes Care | Senseonics Holdings vs. Abbott Laboratories | Senseonics Holdings vs. Align Technology |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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