Correlation Between Trio Petroleum and Xtant Medical

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

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

Diversification Opportunities for Trio Petroleum and Xtant Medical

0.92

Correlation Coefficient

Trio Petroleum  Xtant Medical

Almost no diversification

The 3 months correlation between Trio and Xtant is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Trio Petroleum Corp 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 Trio Petroleum 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 Trio Petroleum Corp 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 Trio Petroleum i.e., Trio Petroleum and Xtant Medical go up and down completely randomly.

Pair Corralation between Trio Petroleum and Xtant Medical

Given the investment horizon of 90 days Trio Petroleum Corp is expected to under-perform the Xtant Medical. In addition to that, Trio Petroleum is 1.53 times more volatile than Xtant Medical Holdings. It trades about -0.32 of its total potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.14 per unit of volatility. If you would invest  57.00  in Xtant Medical Holdings on September 17, 2024 and sell it today you would lose (19.80) from holding Xtant Medical Holdings or give up 34.74% of portfolio value over 90 days.

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

Trio Petroleum Corp  vs.  Xtant Medical Holdings

Trio Petroleum Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Petroleum Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental 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.

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 Trio Petroleum and Xtant Medical

The main advantage of trading using opposite Trio Petroleum and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Petroleum 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 Trio Petroleum Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.