Correlation Between Edwards Lifesciences and Align Technology
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Align Technology 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 Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edwards Lifesciences Corp and Align Technology, you can compare the effects of market volatilities on Edwards Lifesciences and Align Technology 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 Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Align Technology.
Diversification Opportunities for Edwards Lifesciences and Align Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Edwards and Align is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Corp are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Align Technology go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Align Technology
Allowing for the 90-day total investment horizon Edwards Lifesciences is expected to generate 1.95 times less return on investment than Align Technology. But when comparing it to its historical volatility, Edwards Lifesciences Corp is 1.48 times less risky than Align Technology. It trades about 0.09 of its potential returns per unit of risk. Align Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13,686 in Align Technology on September 7, 2025 and sell it today you would earn a total of 2,035 from holding Align Technology or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Align Technology
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Align Technology |
Edwards Lifesciences and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Align Technology
The main advantage of trading using opposite Edwards Lifesciences and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Edwards Lifesciences vs. Zijin Mining Group | Edwards Lifesciences vs. Hunter Creek Mining | Edwards Lifesciences vs. Eagle Materials | Edwards Lifesciences vs. Kossan Rubber Industries |
| Align Technology vs. Trip Technologies | Align Technology vs. Pintec Technology Holdings | Align Technology vs. Axcelis Technologies | Align Technology vs. Pebblebrook Hotel Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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