Correlation Between Xponential Fitness and Garden Stage
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Garden Stage 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 Garden Stage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Garden Stage Limited, you can compare the effects of market volatilities on Xponential Fitness and Garden Stage 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 Garden Stage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Garden Stage.
Diversification Opportunities for Xponential Fitness and Garden Stage
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xponential and Garden is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Garden Stage Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garden Stage Limited 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 Garden Stage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garden Stage Limited has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Garden Stage go up and down completely randomly.
Pair Corralation between Xponential Fitness and Garden Stage
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.12 times more return on investment than Garden Stage. However, Xponential Fitness is 1.12 times more volatile than Garden Stage Limited. It trades about 0.17 of its potential returns per unit of risk. Garden Stage Limited is currently generating about -0.26 per unit of risk. If you would invest 1,241 in Xponential Fitness on September 2, 2024 and sell it today you would earn a total of 283.00 from holding Xponential Fitness or generate 22.8% 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. Garden Stage Limited
Performance |
| Timeline |
| Xponential Fitness |
| Garden Stage Limited |
Xponential Fitness and Garden Stage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Garden Stage
The main advantage of trading using opposite Xponential Fitness and Garden Stage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Garden Stage 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 Garden Stage will offset losses from the drop in Garden Stage's long position.The idea behind Xponential Fitness and Garden Stage Limited 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.| Garden Stage vs. Copa Holdings SA | Garden Stage vs. Toro Co | Garden Stage vs. Acco Brands | Garden Stage vs. HNI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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