Correlation Between Reservoir Media and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Reservoir Media 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 Reservoir Media and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reservoir Media and Xponential Fitness, you can compare the effects of market volatilities on Reservoir Media 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 Reservoir Media with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reservoir Media and Xponential Fitness.
Diversification Opportunities for Reservoir Media and Xponential Fitness
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reservoir and Xponential is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Reservoir Media 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 Reservoir Media 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 Reservoir Media i.e., Reservoir Media and Xponential Fitness go up and down completely randomly.
Pair Corralation between Reservoir Media and Xponential Fitness
Given the investment horizon of 90 days Reservoir Media is expected to generate 1.8 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Reservoir Media is 3.53 times less risky than Xponential Fitness. It trades about 0.33 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,241 in Xponential Fitness on September 2, 2024 and sell it today you would earn a total of 283.00 from holding Xponential Fitness or generate 22.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reservoir Media vs. Xponential Fitness
Performance |
| Timeline |
| Reservoir Media |
| Xponential Fitness |
Reservoir Media and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reservoir Media and Xponential Fitness
The main advantage of trading using opposite Reservoir Media and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reservoir Media 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.| Reservoir Media vs. Reading International | Reservoir Media vs. Marcus | Reservoir Media vs. Gaia Inc | Reservoir Media vs. News Corp B |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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