Correlation Between Xtant Medical and Brainsway
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and Brainsway 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 Brainsway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtant Medical Holdings and Brainsway, you can compare the effects of market volatilities on Xtant Medical and Brainsway 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 Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and Brainsway.
Diversification Opportunities for Xtant Medical and Brainsway
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtant and Brainsway is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway 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 Holdings are associated (or correlated) with Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Xtant Medical i.e., Xtant Medical and Brainsway go up and down completely randomly.
Pair Corralation between Xtant Medical and Brainsway
Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Brainsway. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 1.07 times less risky than Brainsway. The stock trades about -0.44 of its potential returns per unit of risk. The Brainsway is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Brainsway on September 1, 2024 and sell it today you would lose (13.00) from holding Brainsway or give up 1.3% 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 Holdings vs. Brainsway
Performance |
| Timeline |
| Xtant Medical Holdings |
| Brainsway |
Xtant Medical and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and Brainsway
The main advantage of trading using opposite Xtant Medical and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical vs. SurModics |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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