Correlation Between NetEase and Xtant Medical
Can any of the company-specific risk be diversified away by investing in both NetEase 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 NetEase and Xtant Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetEase and Xtant Medical Holdings, you can compare the effects of market volatilities on NetEase 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 NetEase with a short position of Xtant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetEase and Xtant Medical.
Diversification Opportunities for NetEase and Xtant Medical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NetEase and Xtant is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NetEase 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 NetEase 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 NetEase 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 NetEase i.e., NetEase and Xtant Medical go up and down completely randomly.
Pair Corralation between NetEase and Xtant Medical
Given the investment horizon of 90 days NetEase is expected to generate 1.82 times less return on investment than Xtant Medical. But when comparing it to its historical volatility, NetEase is 2.39 times less risky than Xtant Medical. It trades about 0.29 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 47.00 in Xtant Medical Holdings on November 3, 2024 and sell it today you would earn a total of 14.00 from holding Xtant Medical Holdings or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NetEase vs. Xtant Medical Holdings
Performance |
| Timeline |
| NetEase |
| Xtant Medical Holdings |
NetEase and Xtant Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetEase and Xtant Medical
The main advantage of trading using opposite NetEase and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetEase 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.| NetEase vs. Roblox Corp | NetEase vs. Skillz Platform | NetEase vs. Take Two Interactive Software | NetEase vs. Nintendo Co ADR |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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