Correlation Between Celestica and Xtant Medical

Can any of the company-specific risk be diversified away by investing in both Celestica and Xtant Medical 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 Celestica and Xtant Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celestica and Xtant Medical Holdings, you can compare the effects of market volatilities on Celestica and Xtant Medical 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 Celestica with a short position of Xtant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Xtant Medical.

Diversification Opportunities for Celestica and Xtant Medical

-0.89

Correlation Coefficient

Celestica  Xtant Medical

Pay attention - limited upside

The 3 months correlation between Celestica and Xtant is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Xtant Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtant Medical Holdings and Celestica 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 Celestica are associated (or correlated) with Xtant Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtant Medical Holdings has no effect on the direction of Celestica i.e., Celestica and Xtant Medical go up and down completely randomly.

Pair Corralation between Celestica and Xtant Medical

Considering the 90-day investment horizon Celestica is expected to generate 0.87 times more return on investment than Xtant Medical. However, Celestica is 1.15 times less risky than Xtant Medical. It trades about 0.34 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.14 per unit of risk. If you would invest  4,699  in Celestica on September 17, 2024 and sell it today you would earn a total of  5,221  from holding Celestica or generate 111.11% return on investment over 90 days.

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

Celestica  vs.  Xtant Medical Holdings

Celestica

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Celestica and Xtant Medical

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

The idea behind Celestica and Xtant Medical Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.