Correlation Between Xtant Medical and Alvotech

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

Diversification Opportunities for Xtant Medical and Alvotech

0.38

Correlation Coefficient

Xtant Medical  Alvotech

Weak diversification

The 3 months correlation between Xtant and Alvotech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech 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 Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Xtant Medical i.e., Xtant Medical and Alvotech go up and down completely randomly.

Pair Corralation between Xtant Medical and Alvotech

Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 2.5 times more return on investment than Alvotech. However, Xtant Medical is 2.5 times more volatile than Alvotech. It trades about 0.05 of its potential returns per unit of risk. Alvotech is currently generating about -0.14 per unit of risk. If you would invest  46.00  in Xtant Medical Holdings on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Xtant Medical Holdings or generate 6.52% return on investment over 90 days.

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

Xtant Medical Holdings  vs.  Alvotech

Xtant Medical Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xtant Medical Holdings are ranked lower than 3 (%) 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.

Alvotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Xtant Medical and Alvotech

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

The idea behind Xtant Medical Holdings and Alvotech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.