Correlation Between Clarus Corp and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Clarus Corp 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 Clarus Corp and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clarus Corp and Xponential Fitness, you can compare the effects of market volatilities on Clarus Corp 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 Clarus Corp with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarus Corp and Xponential Fitness.
Diversification Opportunities for Clarus Corp and Xponential Fitness
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clarus and Xponential is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Clarus Corp 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 Clarus Corp 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 Clarus Corp i.e., Clarus Corp and Xponential Fitness go up and down completely randomly.
Pair Corralation between Clarus Corp and Xponential Fitness
Given the investment horizon of 90 days Clarus Corp is expected to generate 1.86 times less return on investment than Xponential Fitness. In addition to that, Clarus Corp is 1.01 times more volatile than Xponential Fitness. It trades about 0.1 of its total potential returns per unit of risk. Xponential Fitness is currently generating about 0.19 per unit of volatility. If you would invest 1,567 in Xponential Fitness on November 18, 2024 and sell it today you would earn a total of 166.00 from holding Xponential Fitness or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clarus Corp vs. Xponential Fitness
Performance |
| Timeline |
| Clarus Corp |
| Xponential Fitness |
Clarus Corp and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clarus Corp and Xponential Fitness
The main advantage of trading using opposite Clarus Corp and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarus Corp 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.| Clarus Corp vs. Johnson Outdoors | Clarus Corp vs. Escalade Incorporated | Clarus Corp vs. JAKKS Pacific | Clarus Corp vs. Six Flags Entertainment |
| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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