Correlation Between DexCom and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both DexCom and XTANT MEDICAL 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 XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on DexCom and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and XTANT MEDICAL.
Diversification Opportunities for DexCom and XTANT MEDICAL
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DexCom and XTANT is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of DexCom i.e., DexCom and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between DexCom and XTANT MEDICAL
Assuming the 90 days horizon DexCom Inc is expected to under-perform the XTANT MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, DexCom Inc is 1.69 times less risky than XTANT MEDICAL. The stock trades about -0.01 of its potential returns per unit of risk. The XTANT MEDICAL HLDGS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 62.00 in XTANT MEDICAL HLDGS on September 24, 2024 and sell it today you would lose (28.00) from holding XTANT MEDICAL HLDGS or give up 45.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| DexCom Inc |
| XTANT MEDICAL HLDGS |
DexCom and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and XTANT MEDICAL
The main advantage of trading using opposite DexCom and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.The idea behind DexCom Inc and XTANT MEDICAL HLDGS 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.| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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