Correlation Between Xponential Fitness and Bt Brands
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Bt Brands 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 Xponential Fitness and Bt Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Bt Brands, you can compare the effects of market volatilities on Xponential Fitness and Bt Brands 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 Xponential Fitness with a short position of Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Bt Brands.
Diversification Opportunities for Xponential Fitness and Bt Brands
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xponential and BTBD is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands and Xponential Fitness 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 Xponential Fitness are associated (or correlated) with Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Bt Brands go up and down completely randomly.
Pair Corralation between Xponential Fitness and Bt Brands
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.66 times more return on investment than Bt Brands. However, Xponential Fitness is 1.66 times more volatile than Bt Brands. It trades about 0.08 of its potential returns per unit of risk. Bt Brands is currently generating about -0.07 per unit of risk. If you would invest 1,318 in Xponential Fitness on August 23, 2024 and sell it today you would earn a total of 119.00 from holding Xponential Fitness or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Bt Brands
Performance |
| Timeline |
| Xponential Fitness |
| Bt Brands |
Xponential Fitness and Bt Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Bt Brands
The main advantage of trading using opposite Xponential Fitness and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Bt Brands 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 Bt Brands will offset losses from the drop in Bt Brands' long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. Bowlero Corp | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp |
| Bt Brands vs. Bloomin Brands | Bt Brands vs. BJs Restaurants | Bt Brands vs. Darden Restaurants | Bt Brands vs. Wingstop |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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