Correlation Between Xtant Medical and UNITEDHEALTH

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

Diversification Opportunities for Xtant Medical and UNITEDHEALTH

0.37

Correlation Coefficient

Xtant Medical  UNITEDHEALTH

Weak diversification

The 3 months correlation between Xtant and UNITEDHEALTH is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC 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 UNITEDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITEDHEALTH GROUP INC has no effect on the direction of Xtant Medical i.e., Xtant Medical and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Xtant Medical and UNITEDHEALTH

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the UNITEDHEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 1.21 times less risky than UNITEDHEALTH. The stock trades about -0.38 of its potential returns per unit of risk. The UNITEDHEALTH GROUP INC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  8,296  in UNITEDHEALTH GROUP INC on September 20, 2024 and sell it today you would earn a total of  443.00  from holding UNITEDHEALTH GROUP INC or generate 5.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	63.64%
Values	Daily Returns

Xtant Medical Holdings  vs.  UNITEDHEALTH GROUP INC

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.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITEDHEALTH GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xtant Medical and UNITEDHEALTH

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

The idea behind Xtant Medical Holdings and UNITEDHEALTH GROUP INC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.