Correlation Between Koninklijke Philips and DexCom
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips 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 Koninklijke Philips and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and DexCom Inc, you can compare the effects of market volatilities on Koninklijke Philips 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 Koninklijke Philips with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and DexCom.
Diversification Opportunities for Koninklijke Philips and DexCom
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and DexCom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Koninklijke Philips 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 Koninklijke Philips NV 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 Koninklijke Philips i.e., Koninklijke Philips and DexCom go up and down completely randomly.
Pair Corralation between Koninklijke Philips and DexCom
Considering the 90-day investment horizon Koninklijke Philips NV is expected to generate 0.76 times more return on investment than DexCom. However, Koninklijke Philips NV is 1.32 times less risky than DexCom. 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 1,975 in Koninklijke Philips NV on August 26, 2024 and sell it today you would earn a total of 664.00 from holding Koninklijke Philips NV or generate 33.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. DexCom Inc
Performance |
| Timeline |
| Koninklijke Philips |
| DexCom Inc |
Koninklijke Philips and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and DexCom
The main advantage of trading using opposite Koninklijke Philips and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips 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.| Koninklijke Philips vs. Heartbeam | Koninklijke Philips vs. EUDA Health Holdings | Koninklijke Philips vs. Nutex Health | Koninklijke Philips 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |