Correlation Between Xtant Medical and USA Recycling
Can any of the company-specific risk be diversified away by investing in both Xtant Medical and USA Recycling 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 USA Recycling 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 USA Recycling Industries, you can compare the effects of market volatilities on Xtant Medical and USA Recycling 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 USA Recycling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtant Medical and USA Recycling.
Diversification Opportunities for Xtant Medical and USA Recycling
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtant and USA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and USA Recycling Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Recycling Industries 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 USA Recycling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Recycling Industries has no effect on the direction of Xtant Medical i.e., Xtant Medical and USA Recycling go up and down completely randomly.
Pair Corralation between Xtant Medical and USA Recycling
Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the USA Recycling. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 1.24 times less risky than USA Recycling. The stock trades about -0.08 of its potential returns per unit of risk. The USA Recycling Industries is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 0.13 in USA Recycling Industries on September 14, 2024 and sell it today you would lose (0.12) from holding USA Recycling Industries or give up 92.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtant Medical Holdings vs. USA Recycling Industries
Performance |
| Timeline |
| Xtant Medical Holdings |
| USA Recycling Industries |
Xtant Medical and USA Recycling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtant Medical and USA Recycling
The main advantage of trading using opposite Xtant Medical and USA Recycling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtant Medical position performs unexpectedly, USA Recycling 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 USA Recycling will offset losses from the drop in USA Recycling's long position.| Xtant Medical vs. Avita Medical | Xtant Medical vs. Sight Sciences | Xtant Medical vs. Treace Medical Concepts | Xtant Medical vs. Neuropace |
| USA Recycling vs. Radcom | USA Recycling vs. Sonida Senior Living | USA Recycling vs. Xtant Medical Holdings | USA Recycling vs. FARO Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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