Correlation Between Xponential Fitness and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Commonwealth Bank 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 Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Commonwealth Bank of, you can compare the effects of market volatilities on Xponential Fitness and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Commonwealth Bank.
Diversification Opportunities for Xponential Fitness and Commonwealth Bank
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xponential and Commonwealth is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Xponential Fitness and Commonwealth Bank
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.44 times less return on investment than Commonwealth Bank. In addition to that, Xponential Fitness is 3.82 times more volatile than Commonwealth Bank of. It trades about 0.01 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.07 per unit of volatility. If you would invest 6,764 in Commonwealth Bank of on September 4, 2024 and sell it today you would earn a total of 3,576 from holding Commonwealth Bank of or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Xponential Fitness vs. Commonwealth Bank of
Performance |
| Timeline |
| Xponential Fitness |
| Commonwealth Bank |
Xponential Fitness and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Commonwealth Bank
The main advantage of trading using opposite Xponential Fitness and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Xponential Fitness vs. Hyatt Hotels | Xponential Fitness vs. Smart Share Global | Xponential Fitness vs. Sweetgreen | Xponential Fitness vs. Wyndham Hotels Resorts |
| Commonwealth Bank vs. Svenska Handelsbanken PK | Commonwealth Bank vs. ANZ Group Holdings | Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. National Australia Bank |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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