Correlation Between Xtant Medical and Nexalin Technology

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

Diversification Opportunities for Xtant Medical and Nexalin Technology

0.65

Correlation Coefficient

Xtant Medical  Nexalin Technology

Poor diversification

The 3 months correlation between Xtant and Nexalin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology 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 Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of Xtant Medical i.e., Xtant Medical and Nexalin Technology go up and down completely randomly.

Pair Corralation between Xtant Medical and Nexalin Technology

Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 0.87 times more return on investment than Nexalin Technology. However, Xtant Medical Holdings is 1.14 times less risky than Nexalin Technology. It trades about 0.05 of its potential returns per unit of risk. Nexalin Technology is currently generating about -0.06 per unit of risk. If you would invest  46.00  in Xtant Medical Holdings on December 28, 2024 and sell it today you would earn a total of  2.94  from holding Xtant Medical Holdings or generate 6.39% return on investment over 90 days.

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

Xtant Medical Holdings  vs.  Nexalin Technology

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.

Nexalin Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexalin Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Xtant Medical and Nexalin Technology

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

The idea behind Xtant Medical Holdings and Nexalin Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.