Correlation Between Xponential Fitness and Ecolab
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Ecolab Inc, you can compare the effects of market volatilities on Xponential Fitness and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Ecolab.
Diversification Opportunities for Xponential Fitness and Ecolab
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xponential and Ecolab is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Ecolab go up and down completely randomly.
Pair Corralation between Xponential Fitness and Ecolab
Given the investment horizon of 90 days Xponential Fitness is expected to generate 5.51 times more return on investment than Ecolab. However, Xponential Fitness is 5.51 times more volatile than Ecolab Inc. It trades about 0.08 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.01 per unit of risk. If you would invest 1,266 in Xponential Fitness on September 3, 2024 and sell it today you would earn a total of 258.00 from holding Xponential Fitness or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Ecolab Inc
Performance |
| Timeline |
| Xponential Fitness |
| Ecolab Inc |
Xponential Fitness and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Ecolab
The main advantage of trading using opposite Xponential Fitness and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Mattel Inc | Xponential Fitness vs. OneSpaWorld Holdings |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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