Correlation Between Unilever PLC and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Unilever 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 Unilever 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 Unilever PLC ADR and Xponential Fitness, you can compare the effects of market volatilities on Unilever 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 Unilever PLC with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Xponential Fitness.
Diversification Opportunities for Unilever PLC and Xponential Fitness
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Unilever and Xponential is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Unilever 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 Unilever 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 Unilever 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 Unilever PLC i.e., Unilever PLC and Xponential Fitness go up and down completely randomly.
Pair Corralation between Unilever PLC and Xponential Fitness
Allowing for the 90-day total investment horizon Unilever PLC ADR is expected to under-perform the Xponential Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Unilever PLC ADR is 6.42 times less risky than Xponential Fitness. The stock trades about -0.07 of its potential returns per unit of risk. The 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever PLC ADR vs. Xponential Fitness
Performance |
| Timeline |
| Unilever PLC ADR |
| Xponential Fitness |
Unilever PLC and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Xponential Fitness
The main advantage of trading using opposite Unilever PLC and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever 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.| Unilever PLC vs. The Clorox | Unilever PLC vs. Colgate Palmolive | Unilever PLC vs. Procter Gamble | Unilever PLC vs. Church Dwight |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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