Correlation Between Haleon Plc and DexCom
Can any of the company-specific risk be diversified away by investing in both Haleon Plc 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 Haleon Plc and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and DexCom Inc, you can compare the effects of market volatilities on Haleon Plc 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 Haleon Plc with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and DexCom.
Diversification Opportunities for Haleon Plc and DexCom
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haleon and DexCom is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Haleon Plc 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 Haleon plc 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 Haleon Plc i.e., Haleon Plc and DexCom go up and down completely randomly.
Pair Corralation between Haleon Plc and DexCom
Considering the 90-day investment horizon Haleon plc is expected to under-perform the DexCom. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 2.1 times less risky than DexCom. The stock trades about -0.18 of its potential returns per unit of risk. The DexCom Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,704 in DexCom Inc on August 30, 2024 and sell it today you would earn a total of 1,106 from holding DexCom Inc or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. DexCom Inc
Performance |
| Timeline |
| Haleon plc |
| DexCom Inc |
Haleon Plc and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and DexCom
The main advantage of trading using opposite Haleon Plc and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc 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.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Penumbra | DexCom vs. Insulet |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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