Correlation Between DexCom and Guided Therapeutics
Can any of the company-specific risk be diversified away by investing in both DexCom and Guided Therapeutics 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 Guided Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Guided Therapeutics, you can compare the effects of market volatilities on DexCom and Guided Therapeutics 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 Guided Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Guided Therapeutics.
Diversification Opportunities for DexCom and Guided Therapeutics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DexCom and Guided is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Guided Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guided Therapeutics 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 Guided Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guided Therapeutics has no effect on the direction of DexCom i.e., DexCom and Guided Therapeutics go up and down completely randomly.
Pair Corralation between DexCom and Guided Therapeutics
Given the investment horizon of 90 days DexCom Inc is expected to under-perform the Guided Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, DexCom Inc is 4.76 times less risky than Guided Therapeutics. The stock trades about 0.0 of its potential returns per unit of risk. The Guided Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Guided Therapeutics on November 2, 2024 and sell it today you would lose (14.00) from holding Guided Therapeutics or give up 53.85% 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. Guided Therapeutics
Performance |
| Timeline |
| DexCom Inc |
| Guided Therapeutics |
DexCom and Guided Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Guided Therapeutics
The main advantage of trading using opposite DexCom and Guided Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Guided Therapeutics 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 Guided Therapeutics will offset losses from the drop in Guided Therapeutics' long position.| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Penumbra | DexCom vs. Insulet |
| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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