Correlation Between Xtant Medical and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and RBC Bearings 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 RBC Bearings 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 RBC Bearings Incorporated, you can compare the effects of market volatilities on Xtant Medical and RBC Bearings 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 RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and RBC Bearings.
Diversification Opportunities for Xtant Medical and RBC Bearings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtant and RBC is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings 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 RBC Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Bearings has no effect on the direction of Xtant Medical i.e., Xtant Medical and RBC Bearings go up and down completely randomly.
Pair Corralation between Xtant Medical and RBC Bearings
Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the RBC Bearings. In addition to that, Xtant Medical is 1.39 times more volatile than RBC Bearings Incorporated. It trades about -0.39 of its total potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.34 per unit of volatility. If you would invest 28,530 in RBC Bearings Incorporated on September 2, 2024 and sell it today you would earn a total of 4,981 from holding RBC Bearings Incorporated or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtant Medical Holdings vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Xtant Medical Holdings |
| RBC Bearings |
Xtant Medical and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and RBC Bearings
The main advantage of trading using opposite Xtant Medical and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, RBC Bearings 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 RBC Bearings will offset losses from the drop in RBC Bearings' long position.| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical vs. SurModics |
| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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