Correlation Between Lixte Biotechnology and DexCom
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology 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 Lixte Biotechnology and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixte Biotechnology Holdings and DexCom Inc, you can compare the effects of market volatilities on Lixte Biotechnology 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 Lixte Biotechnology with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and DexCom.
Diversification Opportunities for Lixte Biotechnology and DexCom
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lixte and DexCom is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Lixte Biotechnology 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 Lixte Biotechnology Holdings 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 Lixte Biotechnology i.e., Lixte Biotechnology and DexCom go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and DexCom
Assuming the 90 days horizon Lixte Biotechnology Holdings is expected to generate 8.02 times more return on investment than DexCom. However, Lixte Biotechnology is 8.02 times more volatile than DexCom Inc. It trades about 0.21 of its potential returns per unit of risk. DexCom Inc is currently generating about -0.12 per unit of risk. If you would invest 5.00 in Lixte Biotechnology Holdings on March 2, 2024 and sell it today you would earn a total of 3.40 from holding Lixte Biotechnology Holdings or generate 68.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lixte Biotechnology Holdings vs. DexCom Inc
Performance |
Timeline |
Lixte Biotechnology |
DexCom Inc |
Lixte Biotechnology and DexCom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lixte Biotechnology and DexCom
The main advantage of trading using opposite Lixte Biotechnology and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology 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.Lixte Biotechnology vs. Artelo Biosciences | Lixte Biotechnology vs. Reviva Pharmaceuticals Holdings | Lixte Biotechnology vs. BioCardia | Lixte Biotechnology vs. CannBioRx Life Sciences |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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