Correlation Between Centro De and DexCom

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

By analyzing existing cross correlation between Centro de Imagem and DexCom Inc, you can compare the effects of market volatilities on Centro De 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 Centro De with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centro De and DexCom.

Diversification Opportunities for Centro De and DexCom

-0.05

Correlation Coefficient

Centro De  DexCom

Good diversification

The 3 months correlation between Centro and DexCom is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Centro de Imagem and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Centro De 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 Centro de Imagem 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 Centro De i.e., Centro De and DexCom go up and down completely randomly.

Pair Corralation between Centro De and DexCom

Assuming the 90 days trading horizon Centro de Imagem is expected to under-perform the DexCom. In addition to that, Centro De is 1.51 times more volatile than DexCom Inc. It trades about -0.05 of its total potential returns per unit of risk. DexCom Inc is currently generating about 0.12 per unit of volatility. If you would invest  755.00  in DexCom Inc on April 22, 2025 and sell it today you would earn a total of  134.00  from holding DexCom Inc or generate 17.75% return on investment over 90 days.

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

Centro de Imagem  vs.  DexCom Inc

Centro de Imagem

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centro de Imagem has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

DexCom Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DexCom Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, DexCom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centro De and DexCom

The main advantage of trading using opposite Centro De and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centro De 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.

The idea behind Centro de Imagem and DexCom Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.