Correlation Between Auddia and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Auddia 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 Auddia and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auddia Inc and Xponential Fitness, you can compare the effects of market volatilities on Auddia 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 Auddia with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auddia and Xponential Fitness.
Diversification Opportunities for Auddia and Xponential Fitness
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auddia and Xponential is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Auddia 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 Auddia Inc 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 Auddia i.e., Auddia and Xponential Fitness go up and down completely randomly.
Pair Corralation between Auddia and Xponential Fitness
Assuming the 90 days horizon Auddia Inc is expected to under-perform the Xponential Fitness. In addition to that, Auddia is 1.96 times more volatile than Xponential Fitness. It trades about -0.14 of its total potential returns per unit of risk. Xponential Fitness is currently generating about 0.16 per unit of volatility. If you would invest 1,261 in Xponential Fitness on September 3, 2024 and sell it today you would earn a total of 263.00 from holding Xponential Fitness or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
Auddia Inc vs. Xponential Fitness
Performance |
| Timeline |
| Auddia Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Xponential Fitness |
Auddia and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auddia and Xponential Fitness
The main advantage of trading using opposite Auddia and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auddia 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.| Auddia vs. Xponential Fitness | Auddia vs. Anheuser Busch Inbev | Auddia vs. Waste Management | Auddia vs. Merit Medical Systems |
| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Mattel Inc | Xponential Fitness vs. OneSpaWorld Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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