Correlation Between Shockwave Medical and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Shockwave Medical 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 Shockwave Medical and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shockwave Medical and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Shockwave Medical 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 Shockwave Medical with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shockwave Medical and Edwards Lifesciences.
Diversification Opportunities for Shockwave Medical and Edwards Lifesciences
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shockwave and Edwards is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Shockwave Medical 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 Shockwave Medical 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 Shockwave Medical 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 Shockwave Medical i.e., Shockwave Medical and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Shockwave Medical and Edwards Lifesciences
If you would invest 6,865 in Edwards Lifesciences Corp on August 28, 2024 and sell it today you would earn a total of 262.00 from holding Edwards Lifesciences Corp or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Shockwave Medical vs. Edwards Lifesciences Corp
Performance |
| Timeline |
| Shockwave Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Edwards Lifesciences Corp |
Shockwave Medical and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shockwave Medical and Edwards Lifesciences
The main advantage of trading using opposite Shockwave Medical and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shockwave Medical 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.| Shockwave Medical vs. Inari Medical | Shockwave Medical vs. Outset Medical | Shockwave Medical vs. Clearpoint Neuro | Shockwave Medical vs. Inspire Medical Systems |
| Edwards Lifesciences vs. Medtronic PLC | Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. Zimmer Biomet Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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