Correlation Between Elutia and DexCom
Can any of the company-specific risk be diversified away by investing in both Elutia and DexCom 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 Elutia and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elutia Inc and DexCom Inc, you can compare the effects of market volatilities on Elutia and DexCom 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 Elutia with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elutia and DexCom.
Diversification Opportunities for Elutia and DexCom
Very weak diversification
The 3 months correlation between Elutia and DexCom is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Elutia Inc and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Elutia 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 Elutia Inc are associated (or correlated) with DexCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DexCom Inc has no effect on the direction of Elutia i.e., Elutia and DexCom go up and down completely randomly.
Pair Corralation between Elutia and DexCom
Given the investment horizon of 90 days Elutia Inc is expected to generate 2.08 times more return on investment than DexCom. However, Elutia is 2.08 times more volatile than DexCom Inc. It trades about 0.03 of its potential returns per unit of risk. DexCom Inc is currently generating about -0.01 per unit of risk. If you would invest 425.00 in Elutia Inc on September 20, 2024 and sell it today you would lose (47.00) from holding Elutia Inc or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elutia Inc vs. DexCom Inc
Performance |
| Timeline |
| Elutia Inc |
| DexCom Inc |
Elutia and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elutia and DexCom
The main advantage of trading using opposite Elutia and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elutia position performs unexpectedly, DexCom 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 DexCom will offset losses from the drop in DexCom's long position.The idea behind Elutia Inc and DexCom Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |