Correlation Between RCI Hospitality and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality 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 RCI Hospitality and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Xponential Fitness, you can compare the effects of market volatilities on RCI Hospitality 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 RCI Hospitality with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Xponential Fitness.
Diversification Opportunities for RCI Hospitality and Xponential Fitness
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCI and Xponential is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and RCI Hospitality 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 RCI Hospitality Holdings 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 RCI Hospitality i.e., RCI Hospitality and Xponential Fitness go up and down completely randomly.
Pair Corralation between RCI Hospitality and Xponential Fitness
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Xponential Fitness. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 2.4 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 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,539 in Xponential Fitness on November 19, 2024 and sell it today you would lose (806.00) from holding Xponential Fitness or give up 31.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Xponential Fitness
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Xponential Fitness |
RCI Hospitality and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Xponential Fitness
The main advantage of trading using opposite RCI Hospitality and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality 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.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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