Correlation Between Xtant Medical and Newpark Resources
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and Newpark Resources 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 Newpark Resources 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 Newpark Resources, you can compare the effects of market volatilities on Xtant Medical and Newpark Resources 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 Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and Newpark Resources.
Diversification Opportunities for Xtant Medical and Newpark Resources
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtant and Newpark is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources 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 Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of Xtant Medical i.e., Xtant Medical and Newpark Resources go up and down completely randomly.
Pair Corralation between Xtant Medical and Newpark Resources
Given the investment horizon of 90 days Xtant Medical is expected to generate 2.67 times less return on investment than Newpark Resources. In addition to that, Xtant Medical is 1.84 times more volatile than Newpark Resources. It trades about 0.01 of its total potential returns per unit of risk. Newpark Resources is currently generating about 0.07 per unit of volatility. If you would invest 387.00 in Newpark Resources on September 2, 2024 and sell it today you would earn a total of 449.00 from holding Newpark Resources or generate 116.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtant Medical Holdings vs. Newpark Resources
Performance |
| Timeline |
| Xtant Medical Holdings |
| Newpark Resources |
Xtant Medical and Newpark Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and Newpark Resources
The main advantage of trading using opposite Xtant Medical and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical vs. SurModics |
| Newpark Resources vs. Enerflex | Newpark Resources vs. Now Inc | Newpark Resources vs. Bristow Group | Newpark Resources vs. Helix Energy Solutions |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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