Correlation Between DexCom and Oi SA
Can any of the company-specific risk be diversified away by investing in both DexCom and Oi SA 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 DexCom and Oi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Oi SA, you can compare the effects of market volatilities on DexCom and Oi SA 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 DexCom with a short position of Oi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Oi SA.
Diversification Opportunities for DexCom and Oi SA
Excellent diversification
The 3 months correlation between DexCom and OIBR3 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and DexCom 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 DexCom Inc are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of DexCom i.e., DexCom and Oi SA go up and down completely randomly.
Pair Corralation between DexCom and Oi SA
Assuming the 90 days trading horizon DexCom Inc is expected to generate 0.46 times more return on investment than Oi SA. However, DexCom Inc is 2.16 times less risky than Oi SA. It trades about -0.05 of its potential returns per unit of risk. Oi SA is currently generating about -0.07 per unit of risk. If you would invest 1,335 in DexCom Inc on August 24, 2024 and sell it today you would lose (459.00) from holding DexCom Inc or give up 34.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Oi SA
Performance |
| Timeline |
| DexCom Inc |
| Oi SA |
DexCom and Oi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Oi SA
The main advantage of trading using opposite DexCom and Oi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Oi SA 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 Oi SA will offset losses from the drop in Oi SA's long position.| DexCom vs. Hospital Mater Dei | DexCom vs. Global X Funds | DexCom vs. Ross Stores | DexCom vs. GP Investments |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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