Correlation Between Relx PLC and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Relx PLC 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 Relx PLC and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relx PLC ADR and Xponential Fitness, you can compare the effects of market volatilities on Relx PLC 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 Relx PLC with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relx PLC and Xponential Fitness.
Diversification Opportunities for Relx PLC and Xponential Fitness
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Relx and Xponential is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Relx PLC ADR and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Relx PLC 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 Relx PLC ADR 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 Relx PLC i.e., Relx PLC and Xponential Fitness go up and down completely randomly.
Pair Corralation between Relx PLC and Xponential Fitness
Given the investment horizon of 90 days Relx PLC ADR is expected to generate 0.39 times more return on investment than Xponential Fitness. However, Relx PLC ADR is 2.54 times less risky than Xponential Fitness. It trades about 0.08 of its potential returns per unit of risk. Xponential Fitness is currently generating about -0.13 per unit of risk. If you would invest 4,659 in Relx PLC ADR on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Relx PLC ADR or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relx PLC ADR vs. Xponential Fitness
Performance |
| Timeline |
| Relx PLC ADR |
| Xponential Fitness |
Relx PLC and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relx PLC and Xponential Fitness
The main advantage of trading using opposite Relx PLC and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relx PLC 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.| Relx PLC vs. Maximus | Relx PLC vs. CBIZ Inc | Relx PLC vs. First Advantage Corp | Relx PLC vs. Network 1 Technologies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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