Correlation Between SurModics and Xtant Medical

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

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

Diversification Opportunities for SurModics and Xtant Medical

0.22

Correlation Coefficient

SurModics  Xtant Medical

Modest diversification

The 3 months correlation between SurModics and Xtant is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SurModics 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 SurModics 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 SurModics 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 SurModics i.e., SurModics and Xtant Medical go up and down completely randomly.

Pair Corralation between SurModics and Xtant Medical

Given the investment horizon of 90 days SurModics is expected to under-perform the Xtant Medical. But the stock apears to be less risky and, when comparing its historical volatility, SurModics is 2.53 times less risky than Xtant Medical. The stock trades about -0.16 of its potential returns per unit of risk. The Xtant Medical Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  46.00  in Xtant Medical Holdings on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Xtant Medical Holdings or generate 6.52% return on investment over 90 days.

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

SurModics  vs.  Xtant Medical Holdings

SurModics

Risk-Adjusted Performance

Very Weak

Over the last 90 days SurModics 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 fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xtant Medical Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xtant Medical Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Xtant Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SurModics and Xtant Medical

The main advantage of trading using opposite SurModics and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SurModics 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 SurModics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.