Correlation Between Fluent and Xtant Medical

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

By analyzing existing cross correlation between Fluent Inc and Xtant Medical Holdings, you can compare the effects of market volatilities on Fluent 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 Fluent with a short position of Xtant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Xtant Medical.

Diversification Opportunities for Fluent and Xtant Medical

0.76

Correlation Coefficient

Fluent  Xtant Medical

Poor diversification

The 3 months correlation between Fluent and Xtant is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Xtant Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtant Medical Holdings and Fluent 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 Fluent Inc 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 Holdings has no effect on the direction of Fluent i.e., Fluent and Xtant Medical go up and down completely randomly.

Pair Corralation between Fluent and Xtant Medical

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Xtant Medical. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 1.12 times less risky than Xtant Medical. The stock trades about -0.06 of its potential returns per unit of risk. The Xtant Medical Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Xtant Medical Holdings on September 27, 2024 and sell it today you would earn a total of  3.00  from holding Xtant Medical Holdings or generate 7.5% return on investment over 90 days.

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

Fluent Inc  vs.  Xtant Medical Holdings

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Xtant Medical Holdings

Risk-Adjusted Performance

0 of 100

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 inconsistent 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.

Pair Trading with Fluent and Xtant Medical

The main advantage of trading using opposite Fluent and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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 Fluent Inc and Xtant Medical Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.