Correlation Between Xtant Medical and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and Emerson Electric 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 Emerson Electric 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 Emerson Electric, you can compare the effects of market volatilities on Xtant Medical and Emerson Electric 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 Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and Emerson Electric.
Diversification Opportunities for Xtant Medical and Emerson Electric
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtant and Emerson is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric 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 Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Xtant Medical i.e., Xtant Medical and Emerson Electric go up and down completely randomly.
Pair Corralation between Xtant Medical and Emerson Electric
Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Emerson Electric. In addition to that, Xtant Medical is 3.04 times more volatile than Emerson Electric. It trades about -0.01 of its total potential returns per unit of risk. Emerson Electric is currently generating about 0.09 per unit of volatility. If you would invest 8,158 in Emerson Electric on August 31, 2024 and sell it today you would earn a total of 5,102 from holding Emerson Electric or generate 62.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Xtant Medical Holdings vs. Emerson Electric
Performance |
| Timeline |
| Xtant Medical Holdings |
| Emerson Electric |
Xtant Medical and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and Emerson Electric
The main advantage of trading using opposite Xtant Medical and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric'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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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