Correlation Between CONMED and DexCom

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

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

Diversification Opportunities for CONMED and DexCom

0.37

Correlation Coefficient

CONMED  DexCom

Weak diversification

The 3 months correlation between CONMED and DexCom is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CONMED and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and CONMED 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 CONMED 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 CONMED i.e., CONMED and DexCom go up and down completely randomly.

Pair Corralation between CONMED and DexCom

Given the investment horizon of 90 days CONMED is expected to under-perform the DexCom. But the stock apears to be less risky and, when comparing its historical volatility, CONMED is 1.03 times less risky than DexCom. The stock trades about -0.1 of its potential returns per unit of risk. The DexCom Inc is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  7,800  in DexCom Inc on December 28, 2024 and sell it today you would lose (1,026) from holding DexCom Inc or give up 13.15% of portfolio value over 90 days.

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

CONMED  vs.  DexCom Inc

CONMED

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONMED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DexCom Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days DexCom Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CONMED and DexCom

The main advantage of trading using opposite CONMED and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONMED 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 CONMED 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.