Correlation Between DarioHealth Corp and Stevanato Group

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

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

Diversification Opportunities for DarioHealth Corp and Stevanato Group

-0.53

Correlation Coefficient

DarioHealth Corp  Stevanato Group

Excellent diversification

The 3 months correlation between DarioHealth and Stevanato is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Stevanato Group SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stevanato Group SpA 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 Stevanato Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stevanato Group SpA has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Stevanato Group go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Stevanato Group

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 2.34 times more return on investment than Stevanato Group. However, DarioHealth Corp is 2.34 times more volatile than Stevanato Group SpA. It trades about 0.02 of its potential returns per unit of risk. Stevanato Group SpA is currently generating about 0.0 per unit of risk. If you would invest  201.00  in DarioHealth Corp on October 9, 2024 and sell it today you would lose (48.00) from holding DarioHealth Corp or give up 23.88% of portfolio value over 90 days.

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

DarioHealth Corp  vs.  Stevanato Group SpA

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 latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Stevanato Group SpA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stevanato Group SpA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Stevanato Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DarioHealth Corp and Stevanato Group

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

The idea behind DarioHealth Corp and Stevanato Group SpA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.