Correlation Between Xtant Medical and Aluminumof China

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

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

Diversification Opportunities for Xtant Medical and Aluminumof China

0.21

Correlation Coefficient

Xtant Medical  Aluminumof China

Modest diversification

The 3 months correlation between Xtant and Aluminumof is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Holdings are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of Xtant Medical i.e., Xtant Medical and Aluminumof China go up and down completely randomly.

Pair Corralation between Xtant Medical and Aluminumof China

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Aluminumof China. In addition to that, Xtant Medical is 2.18 times more volatile than Aluminum of. It trades about -0.13 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.17 per unit of volatility. If you would invest  61.00  in Aluminum of on December 20, 2024 and sell it today you would earn a total of  6.00  from holding Aluminum of or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Xtant Medical Holdings  vs.  Aluminum of

Xtant Medical Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtant Medical Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Xtant Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aluminumof China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Aluminumof China reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtant Medical and Aluminumof China

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

The idea behind Xtant Medical Holdings and Aluminum of 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.