Correlation Between Xponential Fitness and Daily Journal
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Daily Journal 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 Daily Journal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Daily Journal Corp, you can compare the effects of market volatilities on Xponential Fitness and Daily Journal 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 Daily Journal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Daily Journal.
Diversification Opportunities for Xponential Fitness and Daily Journal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xponential and Daily is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp 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 Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Daily Journal go up and down completely randomly.
Pair Corralation between Xponential Fitness and Daily Journal
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.02 times less return on investment than Daily Journal. In addition to that, Xponential Fitness is 1.81 times more volatile than Daily Journal Corp. It trades about 0.1 of its total potential returns per unit of risk. Daily Journal Corp is currently generating about 0.19 per unit of volatility. If you would invest 47,385 in Daily Journal Corp on September 13, 2024 and sell it today you would earn a total of 11,470 from holding Daily Journal Corp or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Daily Journal Corp
Performance |
| Timeline |
| Xponential Fitness |
| Daily Journal Corp |
Xponential Fitness and Daily Journal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Daily Journal
The main advantage of trading using opposite Xponential Fitness and Daily Journal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Daily Journal 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 Daily Journal will offset losses from the drop in Daily Journal's long position.The idea behind Xponential Fitness and Daily Journal Corp 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.| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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