Correlation Between Edwards Lifesciences and Alignment Healthcare
Can any of the company-specific risk be diversified away by investing in both Edwards Lifesciences and Alignment Healthcare 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 Alignment Healthcare 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 Alignment Healthcare LLC, you can compare the effects of market volatilities on Edwards Lifesciences and Alignment Healthcare 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 Alignment Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edwards Lifesciences and Alignment Healthcare.
Diversification Opportunities for Edwards Lifesciences and Alignment Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edwards and Alignment is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Edwards Lifesciences Corp and Alignment Healthcare LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alignment Healthcare LLC 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 Alignment Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alignment Healthcare LLC has no effect on the direction of Edwards Lifesciences i.e., Edwards Lifesciences and Alignment Healthcare go up and down completely randomly.
Pair Corralation between Edwards Lifesciences and Alignment Healthcare
Allowing for the 90-day total investment horizon Edwards Lifesciences Corp is expected to generate 0.51 times more return on investment than Alignment Healthcare. However, Edwards Lifesciences Corp is 1.97 times less risky than Alignment Healthcare. It trades about 0.08 of its potential returns per unit of risk. Alignment Healthcare LLC is currently generating about 0.03 per unit of risk. If you would invest 7,139 in Edwards Lifesciences Corp on June 1, 2025 and sell it today you would earn a total of 984.00 from holding Edwards Lifesciences Corp or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edwards Lifesciences Corp vs. Alignment Healthcare LLC
Performance |
| Timeline |
| Edwards Lifesciences Corp |
| Alignment Healthcare LLC |
Edwards Lifesciences and Alignment Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edwards Lifesciences and Alignment Healthcare
The main advantage of trading using opposite Edwards Lifesciences and Alignment Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edwards Lifesciences position performs unexpectedly, Alignment Healthcare 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 Alignment Healthcare will offset losses from the drop in Alignment Healthcare's long position.| Edwards Lifesciences vs. Abbott Laboratories | Edwards Lifesciences vs. Baxter International | Edwards Lifesciences vs. Boston Scientific Corp | Edwards Lifesciences vs. DexCom Inc |
| Alignment Healthcare vs. Oscar Health | Alignment Healthcare vs. Molina Healthcare | Alignment Healthcare vs. Centene Corp | Alignment Healthcare vs. NeueHealth |
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 CEOs Directory module to screen CEOs from public companies around the world.
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