Correlation Between Xtant Medical and Venus Concept

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

Diversification Opportunities for Xtant Medical and Venus Concept

0.22

Correlation Coefficient

Xtant Medical  Venus Concept

Modest diversification

The 3 months correlation between Xtant and Venus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Venus Concept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venus Concept 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 Venus Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venus Concept has no effect on the direction of Xtant Medical i.e., Xtant Medical and Venus Concept go up and down completely randomly.

Pair Corralation between Xtant Medical and Venus Concept

Given the investment horizon of 90 days Xtant Medical Holdings is expected to generate 0.47 times more return on investment than Venus Concept. However, Xtant Medical Holdings is 2.14 times less risky than Venus Concept. It trades about 0.04 of its potential returns per unit of risk. Venus Concept is currently generating about 0.01 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  2.00  from holding Xtant Medical Holdings or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Xtant Medical Holdings  vs.  Venus Concept

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.

Venus Concept

Risk-Adjusted Performance

Weak

Over the last 90 days Venus Concept has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Venus Concept may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Xtant Medical and Venus Concept

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

The idea behind Xtant Medical Holdings and Venus Concept 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.