Correlation Between DexCom and Surgery Partners
Can any of the company-specific risk be diversified away by investing in both DexCom and Surgery Partners 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 Surgery Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Surgery Partners, you can compare the effects of market volatilities on DexCom and Surgery Partners 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 Surgery Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Surgery Partners.
Diversification Opportunities for DexCom and Surgery Partners
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DexCom and Surgery is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners 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 Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of DexCom i.e., DexCom and Surgery Partners go up and down completely randomly.
Pair Corralation between DexCom and Surgery Partners
Given the investment horizon of 90 days DexCom Inc is expected to generate 0.55 times more return on investment than Surgery Partners. However, DexCom Inc is 1.83 times less risky than Surgery Partners. It trades about 0.16 of its potential returns per unit of risk. Surgery Partners is currently generating about -0.26 per unit of risk. If you would invest 7,224 in DexCom Inc on August 30, 2024 and sell it today you would earn a total of 586.00 from holding DexCom Inc or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Surgery Partners
Performance |
| Timeline |
| DexCom Inc |
| Surgery Partners |
DexCom and Surgery Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Surgery Partners
The main advantage of trading using opposite DexCom and Surgery Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Surgery Partners 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 Surgery Partners will offset losses from the drop in Surgery Partners' long position.| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Penumbra | DexCom vs. Insulet |
| Surgery Partners vs. Humana Inc | Surgery Partners vs. Cigna Corp | Surgery Partners vs. Elevance Health | Surgery Partners vs. Centene Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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