Correlation Between DexCom and Sartorius Aktiengesellscha

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

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

Diversification Opportunities for DexCom and Sartorius Aktiengesellscha

-0.66

Correlation Coefficient

DexCom  Sartorius Aktiengesellscha

Excellent diversification

The 3 months correlation between DexCom and Sartorius is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha and DexCom 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 DexCom Inc are associated (or correlated) with Sartorius Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Aktiengesellscha has no effect on the direction of DexCom i.e., DexCom and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between DexCom and Sartorius Aktiengesellscha

Assuming the 90 days horizon DexCom Inc is expected to generate 0.76 times more return on investment than Sartorius Aktiengesellscha. However, DexCom Inc is 1.31 times less risky than Sartorius Aktiengesellscha. It trades about 0.14 of its potential returns per unit of risk. Sartorius Aktiengesellschaft is currently generating about 0.0 per unit of risk. If you would invest  6,188  in DexCom Inc on September 13, 2024 and sell it today you would earn a total of  1,210  from holding DexCom Inc or generate 19.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

DexCom Inc  vs.  Sartorius Aktiengesellschaft

DexCom Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DexCom Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DexCom reported solid returns over the last few months and may actually be approaching a breakup point.

Sartorius Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sartorius Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sartorius Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DexCom and Sartorius Aktiengesellscha

The main advantage of trading using opposite DexCom and Sartorius Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DexCom position performs unexpectedly, Sartorius Aktiengesellscha 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 Sartorius Aktiengesellscha will offset losses from the drop in Sartorius Aktiengesellscha's long position.

The idea behind DexCom Inc and Sartorius Aktiengesellschaft 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.