Correlation Between Xtant Medical and ReShape Lifesciences
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences, you can compare the effects of market volatilities on Xtant Medical and ReShape Lifesciences 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 ReShape Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and ReShape Lifesciences.
Diversification Opportunities for Xtant Medical and ReShape Lifesciences
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtant and ReShape is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences 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 ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of Xtant Medical i.e., Xtant Medical and ReShape Lifesciences go up and down completely randomly.
Pair Corralation between Xtant Medical and ReShape Lifesciences
Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 0.67 times more return on investment than ReShape Lifesciences. However, Xtant Medical Holdings is 1.5 times less risky than ReShape Lifesciences. It trades about -0.01 of its potential returns per unit of risk. ReShape Lifesciences is currently generating about -0.09 per unit of risk. If you would invest 67.00 in Xtant Medical Holdings on September 2, 2024 and sell it today you would lose (27.00) from holding Xtant Medical Holdings or give up 40.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Xtant Medical Holdings vs. ReShape Lifesciences
Performance |
| Timeline |
| Xtant Medical Holdings |
| ReShape Lifesciences |
Xtant Medical and ReShape Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and ReShape Lifesciences
The main advantage of trading using opposite Xtant Medical and ReShape Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, ReShape Lifesciences 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 ReShape Lifesciences will offset losses from the drop in ReShape Lifesciences' long position.| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical vs. SurModics |
| ReShape Lifesciences vs. SINTX Technologies | ReShape Lifesciences vs. Bone Biologics Corp | ReShape Lifesciences vs. Tivic Health Systems | ReShape Lifesciences vs. Nuwellis |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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