Correlation Between Encision and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Encision 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 Encision and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encision and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Encision 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 Encision with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encision and Edwards Lifesciences.
Diversification Opportunities for Encision and Edwards Lifesciences
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Encision and Edwards is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Encision 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 Encision 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 Encision 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 Encision i.e., Encision and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Encision and Edwards Lifesciences
If you would invest 8,712 in Edwards Lifesciences Corp on February 12, 2024 and sell it today you would lose (40.00) from holding Edwards Lifesciences Corp or give up 0.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 1.56% |
Values | Daily Returns |
Encision vs. Edwards Lifesciences Corp
Performance |
Timeline |
Encision |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Edwards Lifesciences Corp |
Encision and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Encision and Edwards Lifesciences
The main advantage of trading using opposite Encision and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encision 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.Encision vs. Procyon | Encision vs. Environmmtl Tectonic | Encision vs. SCI Engineered Materials | Encision vs. Electronic Control Security |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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