Correlation Between APPLIED MATERIALS and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS 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 APPLIED MATERIALS and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on APPLIED MATERIALS 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 APPLIED MATERIALS with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and XTANT MEDICAL.
Diversification Opportunities for APPLIED MATERIALS and XTANT MEDICAL
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APPLIED and XTANT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS i.e., APPLIED MATERIALS and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and XTANT MEDICAL
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to under-perform the XTANT MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, APPLIED MATERIALS is 2.12 times less risky than XTANT MEDICAL. The stock trades about -0.07 of its potential returns per unit of risk. The XTANT MEDICAL HLDGS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 51.00 in XTANT MEDICAL HLDGS on October 14, 2024 and sell it today you would lose (8.00) from holding XTANT MEDICAL HLDGS or give up 15.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| APPLIED MATERIALS |
| XTANT MEDICAL HLDGS |
APPLIED MATERIALS and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and XTANT MEDICAL
The main advantage of trading using opposite APPLIED MATERIALS and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS 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.| APPLIED MATERIALS vs. JD SPORTS FASH | APPLIED MATERIALS vs. WIZZ AIR HLDGUNSPADR4 | APPLIED MATERIALS vs. SPORTING | APPLIED MATERIALS vs. Fukuyama Transporting Co |
| XTANT MEDICAL vs. CONAGRA FOODS | XTANT MEDICAL vs. Fast Retailing Co | XTANT MEDICAL vs. Retail Estates NV | XTANT MEDICAL vs. MARKET VECTR RETAIL |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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