Correlation Between Avita Medical and DexCom
Can any of the company-specific risk be diversified away by investing in both Avita Medical 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 Avita Medical and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and DexCom Inc, you can compare the effects of market volatilities on Avita Medical 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 Avita Medical with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and DexCom.
Diversification Opportunities for Avita Medical and DexCom
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avita and DexCom is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Avita Medical 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 Avita Medical 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 Avita Medical i.e., Avita Medical and DexCom go up and down completely randomly.
Pair Corralation between Avita Medical and DexCom
Given the investment horizon of 90 days Avita Medical is expected to generate 1.45 times more return on investment than DexCom. However, Avita Medical is 1.45 times more volatile than DexCom Inc. It trades about 0.0 of its potential returns per unit of risk. DexCom Inc is currently generating about 0.0 per unit of risk. If you would invest 1,250 in Avita Medical on December 7, 2024 and sell it today you would lose (420.00) from holding Avita Medical or give up 33.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. DexCom Inc
Performance |
| Timeline |
| Avita Medical |
| DexCom Inc |
Avita Medical and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and DexCom
The main advantage of trading using opposite Avita Medical and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical 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.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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