Correlation Between Xtant Medical and Heartbeam Warrant

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

Diversification Opportunities for Xtant Medical and Heartbeam Warrant

-0.82

Correlation Coefficient

Xtant Medical  Heartbeam Warrant

Pay attention - limited upside

The 3 months correlation between Xtant and Heartbeam is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Heartbeam Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam Warrant 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 Heartbeam Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartbeam Warrant has no effect on the direction of Xtant Medical i.e., Xtant Medical and Heartbeam Warrant go up and down completely randomly.

Pair Corralation between Xtant Medical and Heartbeam Warrant

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Heartbeam Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 11.16 times less risky than Heartbeam Warrant. The stock trades about 0.0 of its potential returns per unit of risk. The Heartbeam Warrant is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  109.00  in Heartbeam Warrant on September 20, 2024 and sell it today you would lose (39.00) from holding Heartbeam Warrant or give up 35.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	78.43%
Values	Daily Returns

Xtant Medical Holdings  vs.  Heartbeam Warrant

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 conflicting 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.

Heartbeam Warrant

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heartbeam Warrant are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Heartbeam Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtant Medical and Heartbeam Warrant

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

The idea behind Xtant Medical Holdings and Heartbeam Warrant 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.