Correlation Between Axonics Modulation and Edwards Lifesciences

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

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

Diversification Opportunities for Axonics Modulation and Edwards Lifesciences

0.66

Correlation Coefficient

Axonics Modulation  Edwards Lifesciences

Poor diversification

The 3 months correlation between Axonics and Edwards is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axonics Modulation Technologie 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 Axonics Modulation 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 Axonics Modulation Technologies 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 Axonics Modulation i.e., Axonics Modulation and Edwards Lifesciences go up and down completely randomly.

Pair Corralation between Axonics Modulation and Edwards Lifesciences

If you would invest  7,048  in Edwards Lifesciences Corp on September 23, 2024 and sell it today you would earn a total of  433.00  from holding Edwards Lifesciences Corp or generate 6.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Axonics Modulation Technologie  vs.  Edwards Lifesciences Corp

Axonics Modulation

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Axonics Modulation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axonics Modulation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Edwards Lifesciences Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edwards Lifesciences Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Edwards Lifesciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Axonics Modulation and Edwards Lifesciences

The main advantage of trading using opposite Axonics Modulation and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axonics Modulation 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 Axonics Modulation Technologies and Edwards Lifesciences 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.