Correlation Between Nampak and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Nampak 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 Nampak and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nampak and Xponential Fitness, you can compare the effects of market volatilities on Nampak 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 Nampak with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nampak and Xponential Fitness.
Diversification Opportunities for Nampak and Xponential Fitness
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nampak and Xponential is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nampak and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Nampak 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 Nampak 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 Nampak i.e., Nampak and Xponential Fitness go up and down completely randomly.
Pair Corralation between Nampak and Xponential Fitness
Assuming the 90 days horizon Nampak is expected to generate 27.86 times more return on investment than Xponential Fitness. However, Nampak is 27.86 times more volatile than Xponential Fitness. It trades about 0.14 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.01 per unit of risk. If you would invest 8.00 in Nampak on September 3, 2024 and sell it today you would earn a total of 1,242 from holding Nampak or generate 15525.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 28.48% |
| Values | Daily Returns |
Nampak vs. Xponential Fitness
Performance |
| Timeline |
| Nampak |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xponential Fitness |
Nampak and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nampak and Xponential Fitness
The main advantage of trading using opposite Nampak and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nampak 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.| Nampak vs. Xponential Fitness | Nampak vs. Sonida Senior Living | Nampak vs. Vita Coco | Nampak vs. Brandywine Realty Trust |
| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Mattel Inc | 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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