Correlation Between Dennys Corp and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Dennys 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 Dennys 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 Dennys Corp and Xponential Fitness, you can compare the effects of market volatilities on Dennys 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 Dennys Corp with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Xponential Fitness.
Diversification Opportunities for Dennys Corp and Xponential Fitness
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dennys and Xponential is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Dennys 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 Dennys 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 Dennys Corp i.e., Dennys Corp and Xponential Fitness go up and down completely randomly.
Pair Corralation between Dennys Corp and Xponential Fitness
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Xponential Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Dennys Corp is 2.23 times less risky than Xponential Fitness. The stock trades about -0.04 of its potential returns per unit of risk. The Xponential Fitness is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,259 in Xponential Fitness on August 30, 2024 and sell it today you would earn a total of 262.00 from holding Xponential Fitness or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dennys Corp vs. Xponential Fitness
Performance |
| Timeline |
| Dennys Corp |
| Xponential Fitness |
Dennys Corp and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Xponential Fitness
The main advantage of trading using opposite Dennys Corp and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys 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.| Dennys Corp vs. Chipotle Mexican Grill | Dennys Corp vs. Yum Brands | Dennys Corp vs. The Wendys Co | Dennys Corp vs. McDonalds |
| Xponential Fitness vs. Chipotle Mexican Grill | Xponential Fitness vs. Yum Brands | Xponential Fitness vs. The Wendys Co | Xponential Fitness vs. McDonalds |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |