Correlation Between Software Acquisition and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Software Acquisition 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 Software Acquisition and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Software Acquisition Group and Xponential Fitness, you can compare the effects of market volatilities on Software Acquisition 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 Software Acquisition with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Acquisition and Xponential Fitness.
Diversification Opportunities for Software Acquisition and Xponential Fitness
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Software and Xponential is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Software Acquisition 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 Software Acquisition Group 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 Software Acquisition i.e., Software Acquisition and Xponential Fitness go up and down completely randomly.
Pair Corralation between Software Acquisition and Xponential Fitness
Given the investment horizon of 90 days Software Acquisition Group is expected to under-perform the Xponential Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Software Acquisition Group is 1.74 times less risky than Xponential Fitness. The stock trades about -0.02 of its potential returns per unit of risk. The Xponential Fitness is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Xponential Fitness on September 2, 2024 and sell it today you would earn a total of 305.00 from holding Xponential Fitness or generate 25.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Software Acquisition Group vs. Xponential Fitness
Performance |
| Timeline |
| Software Acquisition |
| Xponential Fitness |
Software Acquisition and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Software Acquisition and Xponential Fitness
The main advantage of trading using opposite Software Acquisition and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition 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.| Software Acquisition vs. Kite Realty Group | Software Acquisition vs. Lululemon Athletica | Software Acquisition vs. Titan Machinery | Software Acquisition vs. Coupang LLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| CEOs Directory Screen CEOs from public companies around the world |