Correlation Between Edwards Lifesciences and Bio Techne

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

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

Diversification Opportunities for Edwards Lifesciences and Bio Techne

0.44

Correlation Coefficient

Edwards Lifesciences  Bio Techne

Very weak diversification

The 3 months correlation between Edwards and Bio is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne 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 are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Bio Techne go up and down completely randomly.

Pair Corralation between Edwards Lifesciences and Bio Techne

Assuming the 90 days horizon Edwards Lifesciences is expected to under-perform the Bio Techne. In addition to that, Edwards Lifesciences is 1.08 times more volatile than Bio Techne Corp. It trades about -0.28 of its total potential returns per unit of risk. Bio Techne Corp is currently generating about 0.33 per unit of volatility. If you would invest  6,950  in Bio Techne Corp on October 25, 2024 and sell it today you would earn a total of  600.00  from holding Bio Techne Corp or generate 8.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Edwards Lifesciences  vs.  Bio Techne Corp

Edwards Lifesciences

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Edwards Lifesciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Edwards Lifesciences may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bio Techne Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bio Techne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Edwards Lifesciences and Bio Techne

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

The idea behind Edwards Lifesciences and Bio Techne Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.