Correlation Between DarioHealth Corp and Tenon Medical

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

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

Diversification Opportunities for DarioHealth Corp and Tenon Medical

0.91

Correlation Coefficient

DarioHealth Corp  Tenon Medical

Almost no diversification

The 3 months correlation between DarioHealth and Tenon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Tenon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenon Medical 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 Tenon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenon Medical has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Tenon Medical go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Tenon Medical

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 1.0 times more return on investment than Tenon Medical. However, DarioHealth Corp is 1.0 times more volatile than Tenon Medical. It trades about -0.03 of its potential returns per unit of risk. Tenon Medical is currently generating about -0.14 per unit of risk. If you would invest  107.00  in DarioHealth Corp on October 6, 2024 and sell it today you would lose (18.00) from holding DarioHealth Corp or give up 16.82% of portfolio value over 90 days.

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

DarioHealth Corp  vs.  Tenon Medical

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.

Tenon Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DarioHealth Corp and Tenon Medical

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

The idea behind DarioHealth Corp and Tenon Medical 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.