Correlation Between Four Seasons and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Four Seasons 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 Four Seasons and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Seasons Education and Xponential Fitness, you can compare the effects of market volatilities on Four Seasons 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 Four Seasons with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Seasons and Xponential Fitness.
Diversification Opportunities for Four Seasons and Xponential Fitness
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Four and Xponential is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Four Seasons Education and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Four Seasons 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 Four Seasons Education 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 Four Seasons i.e., Four Seasons and Xponential Fitness go up and down completely randomly.
Pair Corralation between Four Seasons and Xponential Fitness
Given the investment horizon of 90 days Four Seasons Education is expected to under-perform the Xponential Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Four Seasons Education is 2.2 times less risky than Xponential Fitness. The stock trades about -0.03 of its potential returns per unit of risk. The Xponential Fitness is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,205 in Xponential Fitness on September 13, 2024 and sell it today you would earn a total of 233.00 from holding Xponential Fitness or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Four Seasons Education vs. Xponential Fitness
Performance |
| Timeline |
| Four Seasons Education |
| Xponential Fitness |
Four Seasons and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Seasons and Xponential Fitness
The main advantage of trading using opposite Four Seasons and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Seasons 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.| Four Seasons vs. Wah Fu Education | Four Seasons vs. Sunlands Technology Group | Four Seasons vs. 51Talk Online Education | Four Seasons vs. China Liberal Education |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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