Correlation Between XTANT MEDICAL and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both XTANT MEDICAL and Abbott Laboratories 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 XTANT MEDICAL and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XTANT MEDICAL HLDGS and Abbott Laboratories, you can compare the effects of market volatilities on XTANT MEDICAL and Abbott Laboratories 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 XTANT MEDICAL with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTANT MEDICAL and Abbott Laboratories.
Diversification Opportunities for XTANT MEDICAL and Abbott Laboratories
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XTANT and Abbott is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and XTANT MEDICAL 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 XTANT MEDICAL HLDGS are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and Abbott Laboratories go up and down completely randomly.
Pair Corralation between XTANT MEDICAL and Abbott Laboratories
Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to generate 4.42 times more return on investment than Abbott Laboratories. However, XTANT MEDICAL is 4.42 times more volatile than Abbott Laboratories. It trades about 0.02 of its potential returns per unit of risk. Abbott Laboratories is currently generating about 0.02 per unit of risk. If you would invest 54.00 in XTANT MEDICAL HLDGS on October 13, 2024 and sell it today you would lose (11.00) from holding XTANT MEDICAL HLDGS or give up 20.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XTANT MEDICAL HLDGS vs. Abbott Laboratories
Performance |
| Timeline |
| XTANT MEDICAL HLDGS |
| Abbott Laboratories |
XTANT MEDICAL and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XTANT MEDICAL and Abbott Laboratories
The main advantage of trading using opposite XTANT MEDICAL and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XTANT MEDICAL position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| XTANT MEDICAL vs. Japan Asia Investment | XTANT MEDICAL vs. CHRYSALIS INVESTMENTS LTD | XTANT MEDICAL vs. Guangdong Investment Limited | XTANT MEDICAL vs. Cal Maine Foods |
| Abbott Laboratories vs. Spirent Communications plc | Abbott Laboratories vs. Charter Communications | Abbott Laboratories vs. Singapore Reinsurance | Abbott Laboratories vs. Zurich Insurance Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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