Correlation Between Bon Natural and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Bon Natural 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 Bon Natural and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and Xponential Fitness, you can compare the effects of market volatilities on Bon Natural 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 Bon Natural with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Xponential Fitness.
Diversification Opportunities for Bon Natural and Xponential Fitness
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bon and Xponential is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Bon Natural 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 Bon Natural Life 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 Bon Natural i.e., Bon Natural and Xponential Fitness go up and down completely randomly.
Pair Corralation between Bon Natural and Xponential Fitness
Considering the 90-day investment horizon Bon Natural is expected to generate 1.72 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Bon Natural Life is 1.58 times less risky than Xponential Fitness. It trades about 0.17 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Xponential Fitness on August 28, 2024 and sell it today you would earn a total of 321.00 from holding Xponential Fitness or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. Xponential Fitness
Performance |
| Timeline |
| Bon Natural Life |
| Xponential Fitness |
Bon Natural and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Xponential Fitness
The main advantage of trading using opposite Bon Natural and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural 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.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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