Correlation Between Intuitive Surgical and DexCom
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical and DexCom 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 Intuitive Surgical and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and DexCom Inc, you can compare the effects of market volatilities on Intuitive Surgical and DexCom 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 Intuitive Surgical with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and DexCom.
Diversification Opportunities for Intuitive Surgical and DexCom
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Intuitive and DexCom is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Intuitive Surgical 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 Intuitive Surgical are associated (or correlated) with DexCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DexCom Inc has no effect on the direction of Intuitive Surgical i.e., Intuitive Surgical and DexCom go up and down completely randomly.
Pair Corralation between Intuitive Surgical and DexCom
Given the investment horizon of 90 days Intuitive Surgical is expected to under-perform the DexCom. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Surgical is 1.29 times less risky than DexCom. The stock trades about -0.19 of its potential returns per unit of risk. The DexCom Inc is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 13,993 in DexCom Inc on January 26, 2024 and sell it today you would lose (593.00) from holding DexCom Inc or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Intuitive Surgical vs. DexCom Inc
Performance |
| Timeline |
| Intuitive Surgical |
| DexCom Inc |
Intuitive Surgical and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and DexCom
The main advantage of trading using opposite Intuitive Surgical and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical position performs unexpectedly, DexCom 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 DexCom will offset losses from the drop in DexCom's long position.| Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
| DexCom vs. Tandem Diabetes Care | DexCom vs. Inspire Medical Systems | DexCom vs. Shockwave Medical | DexCom vs. Penumbra |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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