Correlation Between Xponential Fitness and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Vita Coco 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 Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Vita Coco, you can compare the effects of market volatilities on Xponential Fitness and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Vita Coco.
Diversification Opportunities for Xponential Fitness and Vita Coco
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xponential and Vita is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Vita Coco go up and down completely randomly.
Pair Corralation between Xponential Fitness and Vita Coco
Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Vita Coco. In addition to that, Xponential Fitness is 2.02 times more volatile than Vita Coco. It trades about -0.1 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.27 per unit of volatility. If you would invest 3,385 in Vita Coco on September 15, 2024 and sell it today you would earn a total of 282.00 from holding Vita Coco or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Vita Coco
Performance |
| Timeline |
| Xponential Fitness |
| Vita Coco |
Xponential Fitness and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Vita Coco
The main advantage of trading using opposite Xponential Fitness and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.The idea behind Xponential Fitness and Vita Coco pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Keurig Dr Pepper | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Coca Cola European Partners |
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 Stocks Directory module to find actively traded stocks across global markets.
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