Correlation Between Sweetgreen and Xtant Medical

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

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

Diversification Opportunities for Sweetgreen and Xtant Medical

-0.06

Correlation Coefficient

Sweetgreen  Xtant Medical

Good diversification

The 3 months correlation between Sweetgreen and Xtant is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen 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 Sweetgreen 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 Sweetgreen 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 Sweetgreen i.e., Sweetgreen and Xtant Medical go up and down completely randomly.

Pair Corralation between Sweetgreen and Xtant Medical

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 14.22 times less return on investment than Xtant Medical. But when comparing it to its historical volatility, Sweetgreen is 1.56 times less risky than Xtant Medical. It trades about 0.03 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Xtant Medical Holdings on October 22, 2024 and sell it today you would earn a total of  12.00  from holding Xtant Medical Holdings or generate 30.0% return on investment over 90 days.

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

Sweetgreen  vs.  Xtant Medical Holdings

Sweetgreen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 comparatively stable basic indicators, Xtant Medical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sweetgreen and Xtant Medical

The main advantage of trading using opposite Sweetgreen and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen 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 Sweetgreen 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.