Correlation Between Laboratory and Xtant Medical

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

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

Diversification Opportunities for Laboratory and Xtant Medical

-0.69

Correlation Coefficient

Laboratory  Xtant Medical

Excellent diversification

The 3 months correlation between Laboratory and Xtant is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of 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 Laboratory 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 Laboratory of 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 Laboratory i.e., Laboratory and Xtant Medical go up and down completely randomly.

Pair Corralation between Laboratory and Xtant Medical

Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.63 times more return on investment than Xtant Medical. However, Laboratory of is 1.6 times less risky than Xtant Medical. It trades about -0.2 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.3 per unit of risk. If you would invest  23,895  in Laboratory of on September 23, 2024 and sell it today you would lose (1,034) from holding Laboratory of or give up 4.33% of portfolio value over 90 days.

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

Laboratory of  vs.  Xtant Medical Holdings

Laboratory

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Laboratory is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 Laboratory and Xtant Medical

The main advantage of trading using opposite Laboratory and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory 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 Laboratory of 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.