Correlation Between Motus GI and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Motus GI 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 Motus GI and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motus GI Holdings and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Motus GI 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 Motus GI with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motus GI and Edwards Lifesciences.
Diversification Opportunities for Motus GI and Edwards Lifesciences
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Motus and Edwards is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Motus GI 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 Motus GI 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 Motus GI 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 Motus GI i.e., Motus GI and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Motus GI and Edwards Lifesciences
Given the investment horizon of 90 days Motus GI Holdings is expected to under-perform the Edwards Lifesciences. In addition to that, Motus GI is 14.55 times more volatile than Edwards Lifesciences Corp. It trades about -0.55 of its total potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about -0.33 per unit of volatility. If you would invest 9,425 in Edwards Lifesciences Corp on January 29, 2024 and sell it today you would lose (782.00) from holding Edwards Lifesciences Corp or give up 8.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 66.67% |
Values | Daily Returns |
Motus GI Holdings vs. Edwards Lifesciences Corp
Performance |
Timeline |
Motus GI Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Edwards Lifesciences Corp |
Motus GI and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Motus GI and Edwards Lifesciences
The main advantage of trading using opposite Motus GI and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motus GI 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.Motus GI vs. ENDRA Life Sciences | Motus GI vs. Electrocore LLC | Motus GI vs. Aileron Therapeutics | Motus GI vs. Check Cap |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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