Correlation Between JD Sports and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Xponential Fitness, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Xponential Fitness.
Diversification Opportunities for JD Sports and Xponential Fitness
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDSPY and Xponential is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Xponential Fitness go up and down completely randomly.
Pair Corralation between JD Sports and Xponential Fitness
Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.7 times more return on investment than Xponential Fitness. However, JD Sports Fashion is 1.43 times less risky than Xponential Fitness. It trades about 0.01 of its potential returns per unit of risk. Xponential Fitness is currently generating about -0.19 per unit of risk. If you would invest 98.00 in JD Sports Fashion on November 28, 2024 and sell it today you would earn a total of 0.00 from holding JD Sports Fashion or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Xponential Fitness
Performance |
| Timeline |
| JD Sports Fashion |
| Xponential Fitness |
JD Sports and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Xponential Fitness
The main advantage of trading using opposite JD Sports and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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