Correlation Between DarioHealth Corp and Nexalin Technology

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

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

Diversification Opportunities for DarioHealth Corp and Nexalin Technology

-0.46

Correlation Coefficient

DarioHealth Corp  Nexalin Technology

Very good diversification

The 3 months correlation between DarioHealth and Nexalin is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology 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 Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Nexalin Technology go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Nexalin Technology

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 508.61 times less return on investment than Nexalin Technology. But when comparing it to its historical volatility, DarioHealth Corp is 17.95 times less risky than Nexalin Technology. It trades about 0.01 of its potential returns per unit of risk. Nexalin Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Nexalin Technology on October 25, 2024 and sell it today you would earn a total of  24.00  from holding Nexalin Technology or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.36%
Values	Daily Returns

DarioHealth Corp  vs.  Nexalin Technology

DarioHealth Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DarioHealth Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, DarioHealth Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Nexalin Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nexalin Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Nexalin Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DarioHealth Corp and Nexalin Technology

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

The idea behind DarioHealth Corp and Nexalin Technology 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..