Correlation Between DexCom and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both DexCom and Thermo Fisher 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 Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Thermo Fisher Scientific, you can compare the effects of market volatilities on DexCom and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Thermo Fisher.
Diversification Opportunities for DexCom and Thermo Fisher
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DexCom and Thermo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of DexCom i.e., DexCom and Thermo Fisher go up and down completely randomly.
Pair Corralation between DexCom and Thermo Fisher
Assuming the 90 days horizon DexCom Inc is expected to generate 0.79 times more return on investment than Thermo Fisher. However, DexCom Inc is 1.27 times less risky than Thermo Fisher. It trades about -0.04 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.14 per unit of risk. If you would invest 8,218 in DexCom Inc on November 19, 2024 and sell it today you would lose (142.00) from holding DexCom Inc or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Thermo Fisher Scientific
Performance |
| Timeline |
| DexCom Inc |
| Thermo Fisher Scientific |
DexCom and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Thermo Fisher
The main advantage of trading using opposite DexCom and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| DexCom vs. Inspire Medical Systems | DexCom vs. ITALIAN WINE BRANDS | DexCom vs. G8 EDUCATION | DexCom vs. Compugroup Medical SE |
| Thermo Fisher vs. Alibaba Health Information | Thermo Fisher vs. Pure Storage | Thermo Fisher vs. NXP Semiconductors NV | Thermo Fisher vs. Hua Hong Semiconductor |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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