Correlation Between XTANT MEDICAL and CAPITAL ONE

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

By analyzing existing cross correlation between XTANT MEDICAL HLDGS and CAPITAL ONE FIN, you can compare the effects of market volatilities on XTANT MEDICAL and CAPITAL ONE 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 CAPITAL ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTANT MEDICAL and CAPITAL ONE.

Diversification Opportunities for XTANT MEDICAL and CAPITAL ONE

0.69

Correlation Coefficient

XTANT MEDICAL  CAPITAL ONE

Poor diversification

The 3 months correlation between XTANT and CAPITAL is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS and CAPITAL ONE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FIN 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 HLDGS are associated (or correlated) with CAPITAL ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FIN has no effect on the direction of XTANT MEDICAL i.e., XTANT MEDICAL and CAPITAL ONE go up and down completely randomly.

Pair Corralation between XTANT MEDICAL and CAPITAL ONE

Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to generate 1.56 times more return on investment than CAPITAL ONE. However, XTANT MEDICAL is 1.56 times more volatile than CAPITAL ONE FIN. It trades about 0.13 of its potential returns per unit of risk. CAPITAL ONE FIN is currently generating about 0.14 per unit of risk. If you would invest  38.00  in XTANT MEDICAL HLDGS on April 24, 2025 and sell it today you would earn a total of  14.00  from holding XTANT MEDICAL HLDGS or generate 36.84% return on investment over 90 days.

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

XTANT MEDICAL HLDGS  vs.  CAPITAL ONE FIN

XTANT MEDICAL HLDGS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XTANT MEDICAL HLDGS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, XTANT MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.

CAPITAL ONE FIN

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAPITAL ONE FIN are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CAPITAL ONE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XTANT MEDICAL and CAPITAL ONE

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

The idea behind XTANT MEDICAL HLDGS and CAPITAL ONE FIN 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.