Correlation Between DexCom and Ontrak
Can any of the company-specific risk be diversified away by investing in both DexCom and Ontrak 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 Ontrak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Ontrak Inc, you can compare the effects of market volatilities on DexCom and Ontrak 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 Ontrak. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Ontrak.
Diversification Opportunities for DexCom and Ontrak
Very good diversification
The 3 months correlation between DexCom and Ontrak is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Ontrak Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontrak Inc 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 Ontrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontrak Inc has no effect on the direction of DexCom i.e., DexCom and Ontrak go up and down completely randomly.
Pair Corralation between DexCom and Ontrak
Given the investment horizon of 90 days DexCom Inc is expected to generate 0.62 times more return on investment than Ontrak. However, DexCom Inc is 1.61 times less risky than Ontrak. It trades about -0.05 of its potential returns per unit of risk. Ontrak Inc is currently generating about -0.06 per unit of risk. If you would invest 11,671 in DexCom Inc on September 2, 2024 and sell it today you would lose (3,872) from holding DexCom Inc or give up 33.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Ontrak Inc
Performance |
| Timeline |
| DexCom Inc |
| Ontrak Inc |
DexCom and Ontrak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Ontrak
The main advantage of trading using opposite DexCom and Ontrak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Ontrak 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 Ontrak will offset losses from the drop in Ontrak's long position.| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Penumbra | DexCom vs. Insulet |
| Ontrak vs. American Well Corp | Ontrak vs. Root Inc | Ontrak vs. Goodrx Holdings | Ontrak vs. Bigcommerce Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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