Correlation Between DarioHealth Corp and Accuray Incorporated

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

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

Diversification Opportunities for DarioHealth Corp and Accuray Incorporated

-0.42

Correlation Coefficient

DarioHealth Corp  Accuray Incorporated

Very good diversification

The 3 months correlation between DarioHealth and Accuray is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and DarioHealth Corp 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 DarioHealth Corp are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Accuray Incorporated go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Accuray Incorporated

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 2.89 times less return on investment than Accuray Incorporated. In addition to that, DarioHealth Corp is 1.24 times more volatile than Accuray Incorporated. It trades about 0.01 of its total potential returns per unit of risk. Accuray Incorporated is currently generating about 0.04 per unit of volatility. If you would invest  211.00  in Accuray Incorporated on September 2, 2024 and sell it today you would earn a total of  12.00  from holding Accuray Incorporated or generate 5.69% return on investment over 90 days.

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

DarioHealth Corp  vs.  Accuray Incorporated

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, DarioHealth Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Accuray Incorporated

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Accuray Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Accuray Incorporated may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DarioHealth Corp and Accuray Incorporated

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

The idea behind DarioHealth Corp and Accuray Incorporated 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.