Correlation Between Superior Plus and XTANT MEDICAL

Can any of the company-specific risk be diversified away by investing in both Superior Plus and XTANT MEDICAL 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 Superior Plus and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Superior Plus Corp and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Superior Plus and XTANT MEDICAL 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 Superior Plus with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and XTANT MEDICAL.

Diversification Opportunities for Superior Plus and XTANT MEDICAL

0.24

Correlation Coefficient

Superior Plus  XTANT MEDICAL

Modest diversification

The 3 months correlation between Superior and XTANT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS and Superior Plus 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 Superior Plus Corp are associated (or correlated) with XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Superior Plus i.e., Superior Plus and XTANT MEDICAL go up and down completely randomly.

Pair Corralation between Superior Plus and XTANT MEDICAL

Assuming the 90 days horizon Superior Plus is expected to generate 38.46 times less return on investment than XTANT MEDICAL. But when comparing it to its historical volatility, Superior Plus Corp is 3.56 times less risky than XTANT MEDICAL. It trades about 0.03 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  34.00  in XTANT MEDICAL HLDGS on October 22, 2024 and sell it today you would earn a total of  14.00  from holding XTANT MEDICAL HLDGS or generate 41.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Superior Plus Corp  vs.  XTANT MEDICAL HLDGS

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

XTANT MEDICAL HLDGS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in XTANT MEDICAL HLDGS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, XTANT MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Plus and XTANT MEDICAL

The main advantage of trading using opposite Superior Plus and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.

The idea behind Superior Plus Corp and XTANT MEDICAL HLDGS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.