Correlation Between Xtant Medical and Cytek Biosciences

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

Diversification Opportunities for Xtant Medical and Cytek Biosciences

-0.73

Correlation Coefficient

Xtant Medical  Cytek Biosciences

Pay attention - limited upside

The 3 months correlation between Xtant and Cytek is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Cytek Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytek Biosciences 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 Cytek Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytek Biosciences has no effect on the direction of Xtant Medical i.e., Xtant Medical and Cytek Biosciences go up and down completely randomly.

Pair Corralation between Xtant Medical and Cytek Biosciences

Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 1.2 times more return on investment than Cytek Biosciences. However, Xtant Medical is 1.2 times more volatile than Cytek Biosciences. It trades about 0.14 of its potential returns per unit of risk. Cytek Biosciences is currently generating about -0.08 per unit of risk. If you would invest  40.00  in Xtant Medical Holdings on November 28, 2024 and sell it today you would earn a total of  16.00  from holding Xtant Medical Holdings or generate 40.0% return on investment over 90 days.

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

Xtant Medical Holdings  vs.  Cytek Biosciences

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 11 (%) 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.

Cytek Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cytek Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Xtant Medical and Cytek Biosciences

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

The idea behind Xtant Medical Holdings and Cytek Biosciences 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.