Correlation Between DexCom and Retractable Technologies
Can any of the company-specific risk be diversified away by investing in both DexCom and Retractable Technologies 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 Retractable Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Retractable Technologies, you can compare the effects of market volatilities on DexCom and Retractable Technologies 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 Retractable Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Retractable Technologies.
Diversification Opportunities for DexCom and Retractable Technologies
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DexCom and Retractable is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Retractable Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retractable Technologies 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 Retractable Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retractable Technologies has no effect on the direction of DexCom i.e., DexCom and Retractable Technologies go up and down completely randomly.
Pair Corralation between DexCom and Retractable Technologies
Given the investment horizon of 90 days DexCom Inc is expected to generate 0.71 times more return on investment than Retractable Technologies. However, DexCom Inc is 1.42 times less risky than Retractable Technologies. It trades about 0.18 of its potential returns per unit of risk. Retractable Technologies is currently generating about -0.17 per unit of risk. If you would invest 7,180 in DexCom Inc on August 31, 2024 and sell it today you would earn a total of 630.00 from holding DexCom Inc or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Retractable Technologies
Performance |
| Timeline |
| DexCom Inc |
| Retractable Technologies |
DexCom and Retractable Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Retractable Technologies
The main advantage of trading using opposite DexCom and Retractable Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Retractable Technologies 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 Retractable Technologies will offset losses from the drop in Retractable Technologies' long position.| DexCom vs. Abbott Laboratories | DexCom vs. Medtronic PLC | DexCom vs. Edwards Lifesciences Corp | DexCom vs. ZimVie Inc |
| Retractable Technologies vs. Milestone Scientific | Retractable Technologies vs. CarPartsCom | Retractable Technologies vs. OncoCyte Corp | Retractable Technologies vs. Alpha Pro Tech |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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