Correlation Between MEDTECH GLOBAL and Edwards Lifesciences

Can any of the company-specific risk be diversified away by investing in both MEDTECH GLOBAL 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 MEDTECH GLOBAL and Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDTECH GLOBAL and Edwards Lifesciences, you can compare the effects of market volatilities on MEDTECH GLOBAL 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 MEDTECH GLOBAL with a short position of Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDTECH GLOBAL and Edwards Lifesciences.

Diversification Opportunities for MEDTECH GLOBAL and Edwards Lifesciences

0.0

Correlation Coefficient

MEDTECH GLOBAL  Edwards Lifesciences

Pay attention - limited upside

The 3 months correlation between MEDTECH and Edwards is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MEDTECH GLOBAL and Edwards Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences and MEDTECH GLOBAL 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 MEDTECH GLOBAL 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 has no effect on the direction of MEDTECH GLOBAL i.e., MEDTECH GLOBAL and Edwards Lifesciences go up and down completely randomly.

Pair Corralation between MEDTECH GLOBAL and Edwards Lifesciences

If you would invest  0.00  in MEDTECH GLOBAL on December 21, 2024 and sell it today you would earn a total of  0.00  from holding MEDTECH GLOBAL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

MEDTECH GLOBAL  vs.  Edwards Lifesciences

MEDTECH GLOBAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEDTECH GLOBAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, MEDTECH GLOBAL is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Edwards Lifesciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edwards Lifesciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MEDTECH GLOBAL and Edwards Lifesciences

The main advantage of trading using opposite MEDTECH GLOBAL and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDTECH GLOBAL 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.

The idea behind MEDTECH GLOBAL and Edwards Lifesciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.