Correlation Between Xtant Medical and 04010LAZ6

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Can any of the company-specific risk be diversified away by investing in both Xtant Medical and 04010LAZ6 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 04010LAZ6 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 ARES CAPITAL PORATION, you can compare the effects of market volatilities on Xtant Medical and 04010LAZ6 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 04010LAZ6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and 04010LAZ6.

Diversification Opportunities for Xtant Medical and 04010LAZ6

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Xtant and 04010LAZ6 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and ARES CAPITAL PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARES CAPITAL PORATION 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 04010LAZ6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARES CAPITAL PORATION has no effect on the direction of Xtant Medical i.e., Xtant Medical and 04010LAZ6 go up and down completely randomly.

Pair Corralation between Xtant Medical and 04010LAZ6

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the 04010LAZ6. In addition to that, Xtant Medical is 7.18 times more volatile than ARES CAPITAL PORATION. It trades about -0.07 of its total potential returns per unit of risk. ARES CAPITAL PORATION is currently generating about -0.01 per unit of volatility. If you would invest  9,554  in ARES CAPITAL PORATION on September 14, 2024 and sell it today you would lose (135.00) from holding ARES CAPITAL PORATION or give up 1.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.39%
ValuesDaily Returns

Xtant Medical Holdings  vs.  ARES CAPITAL PORATION

 Performance 
       Timeline  
Xtant Medical Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xtant Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
ARES CAPITAL PORATION 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ARES CAPITAL PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 04010LAZ6 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Xtant Medical and 04010LAZ6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtant Medical and 04010LAZ6

The main advantage of trading using opposite Xtant Medical and 04010LAZ6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, 04010LAZ6 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 04010LAZ6 will offset losses from the drop in 04010LAZ6's long position.
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The idea behind Xtant Medical Holdings and ARES CAPITAL PORATION pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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