Correlation Between Xtant Medical and United Guardian

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

Diversification Opportunities for Xtant Medical and United Guardian

0.85

Correlation Coefficient

Xtant Medical  United Guardian

Very poor diversification

The 3 months correlation between Xtant and United is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of Xtant Medical i.e., Xtant Medical and United Guardian go up and down completely randomly.

Pair Corralation between Xtant Medical and United Guardian

Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 1.27 times more return on investment than United Guardian. However, Xtant Medical is 1.27 times more volatile than United Guardian. It trades about -0.08 of its potential returns per unit of risk. United Guardian is currently generating about -0.11 per unit of risk. If you would invest  60.00  in Xtant Medical Holdings on October 11, 2024 and sell it today you would lose (13.00) from holding Xtant Medical Holdings or give up 21.67% of portfolio value over 90 days.

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

Xtant Medical Holdings  vs.  United Guardian

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

United Guardian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Guardian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xtant Medical and United Guardian

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

The idea behind Xtant Medical Holdings and United Guardian 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.