Correlation Between Analog Devices and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Analog Devices and Xponential Fitness 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 Analog Devices and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Xponential Fitness, you can compare the effects of market volatilities on Analog Devices and Xponential Fitness 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 Analog Devices with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Xponential Fitness.
Diversification Opportunities for Analog Devices and Xponential Fitness
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Analog and Xponential is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Analog Devices 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 Analog Devices are associated (or correlated) with Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Analog Devices i.e., Analog Devices and Xponential Fitness go up and down completely randomly.
Pair Corralation between Analog Devices and Xponential Fitness
Considering the 90-day investment horizon Analog Devices is expected to generate 0.34 times more return on investment than Xponential Fitness. However, Analog Devices is 2.97 times less risky than Xponential Fitness. It trades about 0.04 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.0 per unit of risk. If you would invest 17,482 in Analog Devices on August 31, 2024 and sell it today you would earn a total of 4,235 from holding Analog Devices or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Xponential Fitness
Performance |
| Timeline |
| Analog Devices |
| Xponential Fitness |
Analog Devices and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Xponential Fitness
The main advantage of trading using opposite Analog Devices and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Xponential Fitness 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 Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. Bowlero Corp | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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