Correlation Between Teva Pharmaceutical and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Teva Pharmaceutical 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 Teva Pharmaceutical and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharmaceutical Industries and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Teva Pharmaceutical 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 Teva Pharmaceutical with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharmaceutical and XTANT MEDICAL.
Diversification Opportunities for Teva Pharmaceutical and XTANT MEDICAL
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teva and XTANT is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharmaceutical Industries 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 Teva Pharmaceutical 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 Teva Pharmaceutical Industries 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 Teva Pharmaceutical i.e., Teva Pharmaceutical and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Teva Pharmaceutical and XTANT MEDICAL
Assuming the 90 days horizon Teva Pharmaceutical Industries is expected to generate 2.89 times more return on investment than XTANT MEDICAL. However, Teva Pharmaceutical is 2.89 times more volatile than XTANT MEDICAL HLDGS. It trades about 0.26 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 1,605 in Teva Pharmaceutical Industries on September 24, 2024 and sell it today you would earn a total of 515.00 from holding Teva Pharmaceutical Industries or generate 32.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharmaceutical Industries vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Teva Pharmaceutical |
| XTANT MEDICAL HLDGS |
Teva Pharmaceutical and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharmaceutical and XTANT MEDICAL
The main advantage of trading using opposite Teva Pharmaceutical and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharmaceutical 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.| Teva Pharmaceutical vs. Zoetis Inc | Teva Pharmaceutical vs. Takeda Pharmaceutical | Teva Pharmaceutical vs. Eisai Co | Teva Pharmaceutical vs. Shionogi Co |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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