Correlation Between Commonwealth Bank and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank 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 Commonwealth Bank and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Xponential Fitness, you can compare the effects of market volatilities on Commonwealth Bank 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 Commonwealth Bank with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Xponential Fitness.
Diversification Opportunities for Commonwealth Bank and Xponential Fitness
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Commonwealth and Xponential is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Commonwealth Bank 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 Commonwealth Bank of 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 Commonwealth Bank i.e., Commonwealth Bank and Xponential Fitness go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Xponential Fitness
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.26 times more return on investment than Xponential Fitness. However, Commonwealth Bank of is 3.82 times less risky than Xponential Fitness. It trades about 0.07 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.01 per unit of risk. If you would invest 6,764 in Commonwealth Bank of on September 4, 2024 and sell it today you would earn a total of 3,576 from holding Commonwealth Bank of or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Commonwealth Bank of vs. Xponential Fitness
Performance |
| Timeline |
| Commonwealth Bank |
| Xponential Fitness |
Commonwealth Bank and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Xponential Fitness
The main advantage of trading using opposite Commonwealth Bank and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank 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.| Commonwealth Bank vs. Svenska Handelsbanken PK | Commonwealth Bank vs. ANZ Group Holdings | Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. National Australia Bank |
| Xponential Fitness vs. Hyatt Hotels | Xponential Fitness vs. Smart Share Global | Xponential Fitness vs. Sweetgreen | Xponential Fitness vs. Wyndham Hotels Resorts |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |