Correlation Between DexCom and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both DexCom and Aozora Bank 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 Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Aozora Bank, you can compare the effects of market volatilities on DexCom and Aozora Bank 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 Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Aozora Bank.
Diversification Opportunities for DexCom and Aozora Bank
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DexCom and Aozora is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank 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 Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of DexCom i.e., DexCom and Aozora Bank go up and down completely randomly.
Pair Corralation between DexCom and Aozora Bank
Assuming the 90 days horizon DexCom Inc is expected to under-perform the Aozora Bank. In addition to that, DexCom is 1.33 times more volatile than Aozora Bank. It trades about -0.01 of its total potential returns per unit of risk. Aozora Bank is currently generating about 0.0 per unit of volatility. If you would invest 1,780 in Aozora Bank on September 4, 2024 and sell it today you would lose (260.00) from holding Aozora Bank or give up 14.61% 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. Aozora Bank
Performance |
| Timeline |
| DexCom Inc |
| Aozora Bank |
DexCom and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Aozora Bank
The main advantage of trading using opposite DexCom and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| DexCom vs. Thermo Fisher Scientific | DexCom vs. Danaher | DexCom vs. Danaher | DexCom vs. SIEMENS HEALTH ADR050 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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