Correlation Between Xtant Medical and Microbot Medical

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

Diversification Opportunities for Xtant Medical and Microbot Medical

-0.55

Correlation Coefficient

Xtant Medical  Microbot Medical

Excellent diversification

The 3 months correlation between Xtant and Microbot is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xtant Medical Holdings and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical 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 Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Xtant Medical i.e., Xtant Medical and Microbot Medical go up and down completely randomly.

Pair Corralation between Xtant Medical and Microbot Medical

Given the investment horizon of 90 days Xtant Medical Holdings is expected to under-perform the Microbot Medical. But the stock apears to be less risky and, when comparing its historical volatility, Xtant Medical Holdings is 1.25 times less risky than Microbot Medical. The stock trades about -0.44 of its potential returns per unit of risk. The Microbot Medical is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  92.00  in Microbot Medical on September 20, 2024 and sell it today you would earn a total of  5.00  from holding Microbot Medical or generate 5.43% return on investment over 90 days.

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

Xtant Medical Holdings  vs.  Microbot Medical

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.

Microbot Medical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Microbot Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Xtant Medical and Microbot Medical

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

The idea behind Xtant Medical Holdings and Microbot Medical 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.