How have Polynovo shares been performing since leaving the ASX 200?

The Polynovo Ltd (ASX: PNV) share price is heading south again today despite the company not releasing any announcements.

Since the start of the week, the medical device company's shares are down 3% to currently trade at $1.295 each.

While down 1.15% today, this isn't the case for the S&P/ASX 200 Index (ASX: XJO) which is 1.59% higher to 6,535 points at the time of writing.

Let's take a look at what is weighing down the Polynovo share price of late.

What's impacting Polynovo shares?

Besides the recent buying action by the company's board, it has been relatively quiet for Polynovo.

Its last trading update came in early April when management provided a snapshot of the company's third-quarter results.

Since then, Polynovo shares tumbled to a multi-year low of 83.5 cents before rebounding to February 2022 levels.

The share price weakness came off the back of negative investor sentiment across the ASX following fears surrounding a possible recession.

However, added to the mix is the large number of short-sellers on Polynovo's registry.

The latest short position report by the Australian Securities & Investments Commission (ASIC) reveals the level of short interest within companies.

Polynovo remains in the top 10 of short interest ASX stocks, with 10.95% of its shares being shorted by investors.

In case you aren't aware, short-selling is a common trading strategy that aims to profit from the fall in the price of a security. The goal is for an investor to borrow shares then sell them and buy them back at a lower price for a profit.

On top of this, the S&P/ASX 200 Healthcare (ASX: XHJ) sector has fallen by 4.63% in the past week and is down 15% in 2022.

Yet perhaps the biggest selling pressure has come from Polynovo's removal from the S&P/ASX 200 Index (ASX: XJO) which took effect on Monday.

The S&P Dow Jones Indices announced changes in its quarterly rebalance earlier this month.

Polynovo's removal from the ASX 200 means that fund managers must abide by their investing mandate which permits them to only buy shares included in specific indices. It's commonplace that shares can climb or fall after being included in or excluded from a particular index.

Polynovo share price summary

While staging a small rebound from early May onwards, the Polynovo share price is down 15% year-to-date.

When looking at the past 12 months, its shares are deep in the red by 53%.

Based on today's price, Polynovo presides a market capitalisation of about $856 million.