Correlation Between Pro Dex and Daxor

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

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

Diversification Opportunities for Pro Dex and Daxor

0.21

Correlation Coefficient

Pro Dex  Daxor

Modest diversification

The 3 months correlation between Pro and Daxor is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Daxor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daxor and Pro Dex 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 Pro Dex are associated (or correlated) with Daxor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daxor has no effect on the direction of Pro Dex i.e., Pro Dex and Daxor go up and down completely randomly.

Pair Corralation between Pro Dex and Daxor

Given the investment horizon of 90 days Pro Dex is expected to generate 2.14 times more return on investment than Daxor. However, Pro Dex is 2.14 times more volatile than Daxor. It trades about 0.19 of its potential returns per unit of risk. Daxor is currently generating about 0.01 per unit of risk. If you would invest  2,669  in Pro Dex on September 13, 2024 and sell it today you would earn a total of  2,150  from holding Pro Dex or generate 80.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Pro Dex  vs.  Daxor

Pro Dex

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

Daxor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daxor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Daxor is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pro Dex and Daxor

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

The idea behind Pro Dex and Daxor 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.