Correlation Between Diageo PLC and Xtant Medical
Can any of the company-specific risk be diversified away by investing in both Diageo PLC 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 Diageo PLC and Xtant Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diageo PLC ADR and Xtant Medical Holdings, you can compare the effects of market volatilities on Diageo PLC 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 Diageo PLC with a short position of Xtant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and Xtant Medical.
Diversification Opportunities for Diageo PLC and Xtant Medical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diageo and Xtant is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC ADR and Xtant Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtant Medical Holdings and Diageo PLC 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 Diageo PLC ADR 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 Holdings has no effect on the direction of Diageo PLC i.e., Diageo PLC and Xtant Medical go up and down completely randomly.
Pair Corralation between Diageo PLC and Xtant Medical
Considering the 90-day investment horizon Diageo PLC ADR is expected to generate 0.29 times more return on investment than Xtant Medical. However, Diageo PLC ADR is 3.44 times less risky than Xtant Medical. It trades about -0.05 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.02 per unit of risk. If you would invest 14,426 in Diageo PLC ADR on November 3, 2024 and sell it today you would lose (2,429) from holding Diageo PLC ADR or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diageo PLC ADR vs. Xtant Medical Holdings
Performance |
| Timeline |
| Diageo PLC ADR |
| Xtant Medical Holdings |
Diageo PLC and Xtant Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diageo PLC and Xtant Medical
The main advantage of trading using opposite Diageo PLC and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC 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.| Diageo PLC vs. Brown Forman | Diageo PLC vs. MGP Ingredients | Diageo PLC vs. Brown Forman | Diageo PLC vs. Constellation Brands Class |
| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical vs. SurModics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |