Correlation Between DarioHealth Corp and Exagen

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

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

Diversification Opportunities for DarioHealth Corp and Exagen

-0.54

Correlation Coefficient

DarioHealth Corp  Exagen

Excellent diversification

The 3 months correlation between DarioHealth and Exagen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc 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 Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Exagen go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Exagen

Given the investment horizon of 90 days DarioHealth Corp is expected to under-perform the Exagen. But the stock apears to be less risky and, when comparing its historical volatility, DarioHealth Corp is 1.01 times less risky than Exagen. The stock trades about -0.02 of its potential returns per unit of risk. The Exagen Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  290.00  in Exagen Inc on August 31, 2024 and sell it today you would earn a total of  94.00  from holding Exagen Inc or generate 32.41% return on investment over 90 days.

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

DarioHealth Corp  vs.  Exagen Inc

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, DarioHealth Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Exagen Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DarioHealth Corp and Exagen

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

The idea behind DarioHealth Corp and Exagen 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.