Correlation Between XTANT MEDICAL and Valero Energy

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

Diversification Opportunities for XTANT MEDICAL and Valero Energy

-0.12

Correlation Coefficient

XTANT MEDICAL  Valero Energy

Good diversification

The 3 months correlation between XTANT and Valero is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and Valero Energy go up and down completely randomly.

Pair Corralation between XTANT MEDICAL and Valero Energy

Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to under-perform the Valero Energy. In addition to that, XTANT MEDICAL is 2.49 times more volatile than Valero Energy. It trades about 0.0 of its total potential returns per unit of risk. Valero Energy is currently generating about 0.03 per unit of volatility. If you would invest  9,985  in Valero Energy on October 4, 2024 and sell it today you would earn a total of  1,407  from holding Valero Energy or generate 14.09% return on investment over 90 days.

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

XTANT MEDICAL HLDGS  vs.  Valero Energy

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Valero Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valero Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with XTANT MEDICAL and Valero Energy

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

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