Correlation Between Apyx Medical and DexCom

Can any of the company-specific risk be diversified away by investing in both Apyx 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 Apyx Medical and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apyx Medical and DexCom Inc, you can compare the effects of market volatilities on Apyx 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 Apyx Medical with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apyx Medical and DexCom.

Diversification Opportunities for Apyx Medical and DexCom

-0.57

Correlation Coefficient

Apyx Medical  DexCom

Excellent diversification

The 3 months correlation between Apyx and DexCom is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Apyx Medical and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Apyx 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 Apyx 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 Apyx Medical i.e., Apyx Medical and DexCom go up and down completely randomly.

Pair Corralation between Apyx Medical and DexCom

Given the investment horizon of 90 days Apyx Medical is expected to under-perform the DexCom. In addition to that, Apyx Medical is 1.96 times more volatile than DexCom Inc. It trades about -0.16 of its total potential returns per unit of risk. DexCom Inc is currently generating about -0.1 per unit of volatility. If you would invest  8,705  in DexCom Inc on December 5, 2024 and sell it today you would lose (461.00) from holding DexCom Inc or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Apyx Medical  vs.  DexCom Inc

Apyx Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apyx Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DexCom Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DexCom Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, DexCom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apyx Medical and DexCom

The main advantage of trading using opposite Apyx Medical and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apyx 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.

The idea behind Apyx Medical 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.