Correlation Between DarioHealth Corp and Trinseo SA

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

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

Diversification Opportunities for DarioHealth Corp and Trinseo SA

0.17

Correlation Coefficient

DarioHealth Corp  Trinseo SA

Average diversification

The 3 months correlation between DarioHealth and Trinseo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Trinseo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinseo SA 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 Trinseo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinseo SA has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Trinseo SA go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Trinseo SA

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 682.56 times less return on investment than Trinseo SA. In addition to that, DarioHealth Corp is 1.34 times more volatile than Trinseo SA. It trades about 0.0 of its total potential returns per unit of risk. Trinseo SA is currently generating about 0.08 per unit of volatility. If you would invest  282.00  in Trinseo SA on October 20, 2024 and sell it today you would earn a total of  153.00  from holding Trinseo SA or generate 54.26% return on investment over 90 days.

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

DarioHealth Corp  vs.  Trinseo SA

DarioHealth Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DarioHealth Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, DarioHealth Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Trinseo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trinseo SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Trinseo SA is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DarioHealth Corp and Trinseo SA

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

The idea behind DarioHealth Corp and Trinseo SA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.