Correlation Between DexCom and Stryker
Can any of the company-specific risk be diversified away by investing in both DexCom and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DexCom Inc and Stryker, you can compare the effects of market volatilities on DexCom and Stryker 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 Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of DexCom and Stryker.
Diversification Opportunities for DexCom and Stryker
Very weak diversification
The 3 months correlation between DexCom and Stryker is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 Stryker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryker has no effect on the direction of DexCom i.e., DexCom and Stryker go up and down completely randomly.
Pair Corralation between DexCom and Stryker
Given the investment horizon of 90 days DexCom Inc is expected to generate 1.94 times more return on investment than Stryker. However, DexCom is 1.94 times more volatile than Stryker. It trades about 0.16 of its potential returns per unit of risk. Stryker is currently generating about 0.31 per unit of risk. If you would invest 7,210 in DexCom Inc on August 28, 2024 and sell it today you would earn a total of 573.00 from holding DexCom Inc or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DexCom Inc vs. Stryker
Performance |
| Timeline |
| DexCom Inc |
| Stryker |
DexCom and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DexCom and Stryker
The main advantage of trading using opposite DexCom and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Stryker 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 Stryker will offset losses from the drop in Stryker's long position.| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Penumbra | DexCom vs. Insulet |
| Stryker vs. Heartbeam | Stryker vs. EUDA Health Holdings | Stryker vs. Nutex Health | Stryker vs. Healthcare Triangle |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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