Correlation Between Xtant Medical and Axonics Modulation

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

Diversification Opportunities for Xtant Medical and Axonics Modulation

-0.84

Correlation Coefficient

Xtant Medical  Axonics Modulation

Pay attention - limited upside

The 3 months correlation between Xtant and Axonics is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Axonics Modulation Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axonics Modulation 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 Axonics Modulation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axonics Modulation has no effect on the direction of Xtant Medical i.e., Xtant Medical and Axonics Modulation go up and down completely randomly.

Pair Corralation between Xtant Medical and Axonics Modulation

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Axonics Modulation. In addition to that, Xtant Medical is 18.37 times more volatile than Axonics Modulation Technologies. It trades about -0.09 of its total potential returns per unit of risk. Axonics Modulation Technologies is currently generating about 0.2 per unit of volatility. If you would invest  6,916  in Axonics Modulation Technologies on September 3, 2024 and sell it today you would earn a total of  182.00  from holding Axonics Modulation Technologies or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	84.38%
Values	Daily Returns

Xtant Medical Holdings  vs.  Axonics Modulation Technologie

Xtant Medical Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtant Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Axonics Modulation

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Axonics Modulation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axonics Modulation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xtant Medical and Axonics Modulation

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

The idea behind Xtant Medical Holdings and Axonics Modulation Technologies 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.