Correlation Between XTANT MEDICAL and W P

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

Diversification Opportunities for XTANT MEDICAL and W P

0.6

Correlation Coefficient

XTANT MEDICAL  W P

Poor diversification

The 3 months correlation between XTANT and WPY is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey 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 W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and W P go up and down completely randomly.

Pair Corralation between XTANT MEDICAL and W P

Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to generate 3.81 times more return on investment than W P. However, XTANT MEDICAL is 3.81 times more volatile than W P Carey. It trades about 0.02 of its potential returns per unit of risk. W P Carey is currently generating about -0.03 per unit of risk. If you would invest  56.00  in XTANT MEDICAL HLDGS on October 4, 2024 and sell it today you would lose (13.00) from holding XTANT MEDICAL HLDGS or give up 23.21% of portfolio value over 90 days.

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

XTANT MEDICAL HLDGS  vs.  W P Carey

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.

W P Carey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W P Carey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, W P is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with XTANT MEDICAL and W P

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

The idea behind XTANT MEDICAL HLDGS and W P Carey 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.