Correlation Between Xtant Medical and Humatech

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

Diversification Opportunities for Xtant Medical and Humatech

-0.6

Correlation Coefficient

Xtant Medical  Humatech

Excellent diversification

The 3 months correlation between Xtant and Humatech is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Humatech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humatech 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 Humatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humatech has no effect on the direction of Xtant Medical i.e., Xtant Medical and Humatech go up and down completely randomly.

Pair Corralation between Xtant Medical and Humatech

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Humatech. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 46.74 times less risky than Humatech. The stock trades about -0.04 of its potential returns per unit of risk. The Humatech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Humatech on October 10, 2024 and sell it today you would earn a total of  0.17  from holding Humatech or generate 1700.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Xtant Medical Holdings  vs.  Humatech

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Humatech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Humatech are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Humatech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtant Medical and Humatech

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

The idea behind Xtant Medical Holdings and Humatech 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..