Correlation Between Todos Medical and Xtant Medical

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

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

Diversification Opportunities for Todos Medical and Xtant Medical

0.0

Correlation Coefficient

Todos Medical  Xtant Medical

Pay attention - limited upside

The 3 months correlation between Todos and Xtant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Todos Medical 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 Todos Medical 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 Todos Medical 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 Todos Medical i.e., Todos Medical and Xtant Medical go up and down completely randomly.

Pair Corralation between Todos Medical and Xtant Medical

Assuming the 90 days horizon Todos Medical is expected to generate 13.94 times more return on investment than Xtant Medical. However, Todos Medical is 13.94 times more volatile than Xtant Medical Holdings. It trades about 0.05 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.09 per unit of risk. If you would invest  0.04  in Todos Medical on September 23, 2024 and sell it today you would lose (0.04) from holding Todos Medical or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Todos Medical  vs.  Xtant Medical Holdings

Todos Medical

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Todos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Todos Medical is not utilizing all of its potentials. The recent 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 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 Todos Medical and Xtant Medical

The main advantage of trading using opposite Todos Medical and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Todos Medical 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 Todos Medical 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.