Correlation Between Baxter International and Enovis Corp
Can any of the company-specific risk be diversified away by investing in both Baxter International and Enovis Corp 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 Baxter International and Enovis Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Enovis Corp, you can compare the effects of market volatilities on Baxter International and Enovis Corp 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 Baxter International with a short position of Enovis Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Enovis Corp.
Diversification Opportunities for Baxter International and Enovis Corp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baxter and Enovis is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Enovis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enovis Corp and Baxter International 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 Baxter International are associated (or correlated) with Enovis Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enovis Corp has no effect on the direction of Baxter International i.e., Baxter International and Enovis Corp go up and down completely randomly.
Pair Corralation between Baxter International and Enovis Corp
Considering the 90-day investment horizon Baxter International is expected to generate 0.98 times more return on investment than Enovis Corp. However, Baxter International is 1.02 times less risky than Enovis Corp. It trades about 0.04 of its potential returns per unit of risk. Enovis Corp is currently generating about -0.2 per unit of risk. If you would invest 3,339 in Baxter International on December 2, 2024 and sell it today you would earn a total of 112.00 from holding Baxter International or generate 3.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Baxter International vs. Enovis Corp
Performance |
Timeline |
Baxter International |
Enovis Corp |
Baxter International and Enovis Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baxter International and Enovis Corp
The main advantage of trading using opposite Baxter International and Enovis Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International position performs unexpectedly, Enovis Corp 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 Enovis Corp will offset losses from the drop in Enovis Corp's long position.Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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