Correlation Between Avanos Medical and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Avanos Medical and XTANT MEDICAL 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 Avanos Medical and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Avanos Medical and XTANT MEDICAL 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 Avanos Medical with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and XTANT MEDICAL.
Diversification Opportunities for Avanos Medical and XTANT MEDICAL
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avanos and XTANT is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS and Avanos Medical 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 Avanos Medical are associated (or correlated) with XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Avanos Medical i.e., Avanos Medical and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Avanos Medical and XTANT MEDICAL
Assuming the 90 days trading horizon Avanos Medical is expected to under-perform the XTANT MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Avanos Medical is 2.04 times less risky than XTANT MEDICAL. The stock trades about -0.03 of its potential returns per unit of risk. The XTANT MEDICAL HLDGS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 58.00 in XTANT MEDICAL HLDGS on September 28, 2024 and sell it today you would lose (24.00) from holding XTANT MEDICAL HLDGS or give up 41.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Avanos Medical |
| XTANT MEDICAL HLDGS |
Avanos Medical and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and XTANT MEDICAL
The main advantage of trading using opposite Avanos Medical and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
| XTANT MEDICAL vs. CVR Medical Corp | XTANT MEDICAL vs. RETAIL FOOD GROUP | XTANT MEDICAL vs. Clearside Biomedical | XTANT MEDICAL vs. Vastned Retail NV |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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