Correlation Between XTANT MEDICAL and Boston Scientific

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

By analyzing existing cross correlation between XTANT MEDICAL HLDGS and Boston Scientific, you can compare the effects of market volatilities on XTANT MEDICAL and Boston Scientific 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 XTANT MEDICAL with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTANT MEDICAL and Boston Scientific.

Diversification Opportunities for XTANT MEDICAL and Boston Scientific

0.87

Correlation Coefficient

XTANT MEDICAL  Boston Scientific

Very poor diversification

The 3 months correlation between XTANT and Boston is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and Boston Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific and XTANT 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 XTANT MEDICAL HLDGS are associated (or correlated) with Boston Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Scientific has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and Boston Scientific go up and down completely randomly.

Pair Corralation between XTANT MEDICAL and Boston Scientific

Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to generate 2.83 times more return on investment than Boston Scientific. However, XTANT MEDICAL is 2.83 times more volatile than Boston Scientific. It trades about 0.09 of its potential returns per unit of risk. Boston Scientific is currently generating about 0.06 per unit of risk. If you would invest  34.00  in XTANT MEDICAL HLDGS on December 20, 2024 and sell it today you would earn a total of  8.00  from holding XTANT MEDICAL HLDGS or generate 23.53% return on investment over 90 days.

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

XTANT MEDICAL HLDGS  vs.  Boston Scientific

XTANT MEDICAL HLDGS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in XTANT MEDICAL HLDGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, XTANT MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.

Boston Scientific

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Boston Scientific may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with XTANT MEDICAL and Boston Scientific

The main advantage of trading using opposite XTANT MEDICAL and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XTANT MEDICAL position performs unexpectedly, Boston Scientific 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 Boston Scientific will offset losses from the drop in Boston Scientific's long position.

The idea behind XTANT MEDICAL HLDGS and Boston Scientific 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.