Correlation Between DexCom and Superior Plus
Can any of the company-specific risk be diversified away by investing in both DexCom and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Superior Plus Corp, you can compare the effects of market volatilities on DexCom and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Superior Plus.
Diversification Opportunities for DexCom and Superior Plus
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DexCom and Superior is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of DexCom i.e., DexCom and Superior Plus go up and down completely randomly.
Pair Corralation between DexCom and Superior Plus
Assuming the 90 days horizon DexCom Inc is expected to generate 1.53 times more return on investment than Superior Plus. However, DexCom is 1.53 times more volatile than Superior Plus Corp. It trades about -0.02 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.04 per unit of risk. If you would invest 10,970 in DexCom Inc on August 26, 2024 and sell it today you would lose (3,840) from holding DexCom Inc or give up 35.0% 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. Superior Plus Corp
Performance |
| Timeline |
| DexCom Inc |
| Superior Plus Corp |
DexCom and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Superior Plus
The main advantage of trading using opposite DexCom and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| DexCom vs. Superior Plus Corp | DexCom vs. Origin Agritech | DexCom vs. Identiv | DexCom vs. INTUITIVE SURGICAL |
| Superior Plus vs. Fast Retailing Co | Superior Plus vs. Auto Trader Group | Superior Plus vs. Monster Beverage Corp | Superior Plus vs. Suntory Beverage Food |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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