Correlation Between Orthofix Medical and Exponent

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

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

Diversification Opportunities for Orthofix Medical and Exponent

0.28

Correlation Coefficient

Orthofix Medical  Exponent

Modest diversification

The 3 months correlation between Orthofix and Exponent is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Orthofix 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 Orthofix Medical are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Orthofix Medical i.e., Orthofix Medical and Exponent go up and down completely randomly.

Pair Corralation between Orthofix Medical and Exponent

Given the investment horizon of 90 days Orthofix Medical is expected to generate 1.74 times more return on investment than Exponent. However, Orthofix Medical is 1.74 times more volatile than Exponent. It trades about 0.02 of its potential returns per unit of risk. Exponent is currently generating about -0.06 per unit of risk. If you would invest  1,211  in Orthofix Medical on May 9, 2025 and sell it today you would earn a total of  20.00  from holding Orthofix Medical or generate 1.65% return on investment over 90 days.

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

Orthofix Medical  vs.  Exponent

Orthofix Medical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orthofix Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Orthofix Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Exponent

Risk-Adjusted Performance

Weakest

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Exponent is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Orthofix Medical and Exponent

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

The idea behind Orthofix Medical and Exponent 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.