Correlation Between Edwards Lifesciences and Escalon Medical
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Escalon 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 Escalon 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 Escalon Medical Corp, you can compare the effects of market volatilities on Edwards Lifesciences and Escalon 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 Escalon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Escalon Medical.
Diversification Opportunities for Edwards Lifesciences and Escalon Medical
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edwards and Escalon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Escalon Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalon Medical Corp 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 Escalon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escalon Medical Corp has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Escalon Medical go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Escalon Medical
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to generate 0.28 times more return on investment than Escalon Medical. However, Edwards Lifesciences Corp is 3.56 times less risky than Escalon Medical. It trades about -0.01 of its potential returns per unit of risk. Escalon Medical Corp is currently generating about 0.0 per unit of risk. If you would invest 10,483 in Edwards Lifesciences Corp on January 20, 2024 and sell it today you would lose (1,889) from holding Edwards Lifesciences Corp or give up 18.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 39.39% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Escalon Medical Corp
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Escalon Medical Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Edwards Lifesciences and Escalon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Escalon Medical
The main advantage of trading using opposite Edwards Lifesciences and Escalon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Escalon 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 Escalon Medical will offset losses from the drop in Escalon Medical's long position.| Edwards Lifesciences vs. Agilent Technologies | Edwards Lifesciences vs. Illumina | Edwards Lifesciences vs. Waters | Edwards Lifesciences vs. Thermo Fisher Scientific |
| Escalon Medical vs. HireRight Holdings Corp | Escalon Medical vs. Dynatronics | Escalon Medical vs. IRIDEX | Escalon Medical vs. Lifeway Foods |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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