Correlation Between Edwards Lifesciences and MEDTECH GLOBAL

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

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

Diversification Opportunities for Edwards Lifesciences and MEDTECH GLOBAL

0.0

Correlation Coefficient

Edwards Lifesciences  MEDTECH GLOBAL

Pay attention - limited upside

The 3 months correlation between Edwards and MEDTECH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences and MEDTECH GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDTECH GLOBAL 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 are associated (or correlated) with MEDTECH GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDTECH GLOBAL has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and MEDTECH GLOBAL go up and down completely randomly.

Pair Corralation between Edwards Lifesciences and MEDTECH GLOBAL

If you would invest  7,125  in Edwards Lifesciences on October 23, 2024 and sell it today you would lose (387.00) from holding Edwards Lifesciences or give up 5.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Edwards Lifesciences  vs.  MEDTECH GLOBAL

Edwards Lifesciences

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edwards Lifesciences are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Edwards Lifesciences may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MEDTECH GLOBAL

Risk-Adjusted Performance

0 of 100

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 newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Edwards Lifesciences and MEDTECH GLOBAL

The main advantage of trading using opposite Edwards Lifesciences and MEDTECH GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, MEDTECH GLOBAL 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 MEDTECH GLOBAL will offset losses from the drop in MEDTECH GLOBAL's long position.

The idea behind Edwards Lifesciences and MEDTECH GLOBAL 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.