Correlation Between American Outdoor and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both American Outdoor 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 American Outdoor and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Outdoor Brands and Xponential Fitness, you can compare the effects of market volatilities on American Outdoor 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 American Outdoor with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Outdoor and Xponential Fitness.
Diversification Opportunities for American Outdoor and Xponential Fitness
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Xponential is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Outdoor Brands and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and American Outdoor 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 American Outdoor Brands 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 American Outdoor i.e., American Outdoor and Xponential Fitness go up and down completely randomly.
Pair Corralation between American Outdoor and Xponential Fitness
Given the investment horizon of 90 days American Outdoor Brands is expected to generate 0.43 times more return on investment than Xponential Fitness. However, American Outdoor Brands is 2.31 times less risky than Xponential Fitness. It trades about 0.03 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.01 per unit of risk. If you would invest 799.00 in American Outdoor Brands on August 31, 2024 and sell it today you would earn a total of 182.00 from holding American Outdoor Brands or generate 22.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Outdoor Brands vs. Xponential Fitness
Performance |
| Timeline |
| American Outdoor Brands |
| Xponential Fitness |
American Outdoor and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Outdoor and Xponential Fitness
The main advantage of trading using opposite American Outdoor and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Outdoor 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.| American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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