Correlation Between Fomento Economico and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Fomento Economico 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 Fomento Economico and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Economico Mexicano and Xponential Fitness, you can compare the effects of market volatilities on Fomento Economico 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 Fomento Economico with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Xponential Fitness.
Diversification Opportunities for Fomento Economico and Xponential Fitness
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fomento and Xponential is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Fomento Economico 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 Fomento Economico Mexicano 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 Fomento Economico i.e., Fomento Economico and Xponential Fitness go up and down completely randomly.
Pair Corralation between Fomento Economico and Xponential Fitness
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to generate 0.56 times more return on investment than Xponential Fitness. However, Fomento Economico Mexicano is 1.8 times less risky than Xponential Fitness. It trades about -0.1 of its potential returns per unit of risk. Xponential Fitness is currently generating about -0.14 per unit of risk. If you would invest 9,275 in Fomento Economico Mexicano on September 14, 2024 and sell it today you would lose (343.00) from holding Fomento Economico Mexicano or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. Xponential Fitness
Performance |
| Timeline |
| Fomento Economico |
| Xponential Fitness |
Fomento Economico and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and Xponential Fitness
The main advantage of trading using opposite Fomento Economico and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico 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.| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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