Correlation Between Nexgel and DexCom
Can any of the company-specific risk be diversified away by investing in both Nexgel 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 Nexgel and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexgel Inc and DexCom Inc, you can compare the effects of market volatilities on Nexgel 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 Nexgel with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexgel and DexCom.
Diversification Opportunities for Nexgel and DexCom
Poor diversification
The 3 months correlation between Nexgel and DexCom is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Nexgel 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 Nexgel 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 Nexgel i.e., Nexgel and DexCom go up and down completely randomly.
Pair Corralation between Nexgel and DexCom
Given the investment horizon of 90 days Nexgel Inc is expected to generate 1.32 times more return on investment than DexCom. However, Nexgel is 1.32 times more volatile than DexCom Inc. It trades about 0.06 of its potential returns per unit of risk. DexCom Inc is currently generating about -0.03 per unit of risk. If you would invest 209.00 in Nexgel Inc on August 27, 2024 and sell it today you would earn a total of 123.00 from holding Nexgel Inc or generate 58.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexgel Inc vs. DexCom Inc
Performance |
| Timeline |
| Nexgel Inc |
| DexCom Inc |
Nexgel and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexgel and DexCom
The main advantage of trading using opposite Nexgel and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexgel 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.| Nexgel vs. Heartbeam | Nexgel vs. EUDA Health Holdings | Nexgel vs. Nutex Health | Nexgel vs. Healthcare Triangle |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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