Correlation Between DexCom and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both DexCom and WAGNERS HOLDING 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 WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on DexCom and WAGNERS HOLDING 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 WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and WAGNERS HOLDING.
Diversification Opportunities for DexCom and WAGNERS HOLDING
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DexCom and WAGNERS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD 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 WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of DexCom i.e., DexCom and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between DexCom and WAGNERS HOLDING
Assuming the 90 days horizon DexCom Inc is expected to generate 0.54 times more return on investment than WAGNERS HOLDING. However, DexCom Inc is 1.84 times less risky than WAGNERS HOLDING. It trades about 0.08 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.0 per unit of risk. If you would invest 7,446 in DexCom Inc on September 27, 2024 and sell it today you would earn a total of 215.00 from holding DexCom Inc or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| DexCom Inc |
| WAGNERS HOLDING LTD |
DexCom and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and WAGNERS HOLDING
The main advantage of trading using opposite DexCom and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.The idea behind DexCom Inc and WAGNERS HOLDING LTD 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.| WAGNERS HOLDING vs. Tencent Music Entertainment | WAGNERS HOLDING vs. GAMING FAC SA | WAGNERS HOLDING vs. Seven West Media | WAGNERS HOLDING vs. Live Nation Entertainment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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