Correlation Between XTANT MEDICAL and Brown Brown

Can any of the company-specific risk be diversified away by investing in both XTANT MEDICAL and Brown Brown 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 Brown Brown 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 Brown Brown, you can compare the effects of market volatilities on XTANT MEDICAL and Brown Brown 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 Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTANT MEDICAL and Brown Brown.

Diversification Opportunities for XTANT MEDICAL and Brown Brown

-0.71

Correlation Coefficient

XTANT MEDICAL  Brown Brown

Pay attention - limited upside

The 3 months correlation between XTANT and Brown is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown 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 Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and Brown Brown go up and down completely randomly.

Pair Corralation between XTANT MEDICAL and Brown Brown

Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to generate 1.56 times more return on investment than Brown Brown. However, XTANT MEDICAL is 1.56 times more volatile than Brown Brown. It trades about -0.21 of its potential returns per unit of risk. Brown Brown is currently generating about -0.34 per unit of risk. If you would invest  37.00  in XTANT MEDICAL HLDGS on September 28, 2024 and sell it today you would lose (3.00) from holding XTANT MEDICAL HLDGS or give up 8.11% of portfolio value over 90 days.

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

XTANT MEDICAL HLDGS  vs.  Brown Brown

XTANT MEDICAL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XTANT MEDICAL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Brown Brown

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brown Brown are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brown Brown may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with XTANT MEDICAL and Brown Brown

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

The idea behind XTANT MEDICAL HLDGS and Brown Brown 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.