Correlation Between DexCom and Check Cap

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

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

Diversification Opportunities for DexCom and Check Cap

-0.63

Correlation Coefficient

DexCom  Check Cap

Excellent diversification

The 3 months correlation between DexCom and Check is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding DexCom Inc and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap and DexCom 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 DexCom Inc are associated (or correlated) with Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of DexCom i.e., DexCom and Check Cap go up and down completely randomly.

Pair Corralation between DexCom and Check Cap

Given the investment horizon of 90 days DexCom Inc is expected to under-perform the Check Cap. But the stock apears to be less risky and, when comparing its historical volatility, DexCom Inc is 8.96 times less risky than Check Cap. The stock trades about -0.13 of its potential returns per unit of risk. The Check Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  80.00  in Check Cap on July 9, 2025 and sell it today you would earn a total of  131.00  from holding Check Cap or generate 163.75% return on investment over 90 days.

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

DexCom Inc  vs.  Check Cap

DexCom Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days DexCom Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Check Cap

Risk-Adjusted Performance

Fair

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

Pair Trading with DexCom and Check Cap

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

The idea behind DexCom Inc and Check Cap 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.