Correlation Between Abbott Laboratories and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories 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 Abbott Laboratories and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Abbott Laboratories 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 Abbott Laboratories with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and XTANT MEDICAL.
Diversification Opportunities for Abbott Laboratories and XTANT MEDICAL
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abbott and XTANT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories 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 Abbott Laboratories 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 Abbott Laboratories 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 Abbott Laboratories i.e., Abbott Laboratories and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Abbott Laboratories and XTANT MEDICAL
Assuming the 90 days horizon Abbott Laboratories is expected to generate 0.38 times more return on investment than XTANT MEDICAL. However, Abbott Laboratories is 2.66 times less risky than XTANT MEDICAL. It trades about -0.18 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about -0.13 per unit of risk. If you would invest 11,286 in Abbott Laboratories on September 24, 2024 and sell it today you would lose (324.00) from holding Abbott Laboratories or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Abbott Laboratories |
| XTANT MEDICAL HLDGS |
Abbott Laboratories and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and XTANT MEDICAL
The main advantage of trading using opposite Abbott Laboratories and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories 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.| Abbott Laboratories vs. SEALED AIR | Abbott Laboratories vs. Fair Isaac Corp | Abbott Laboratories vs. The Hanover Insurance | Abbott Laboratories vs. REVO INSURANCE SPA |
| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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