Correlation Between Xponential Fitness and Leef Brands
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Leef Brands 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 Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Leef Brands, you can compare the effects of market volatilities on Xponential Fitness and Leef Brands 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 Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Leef Brands.
Diversification Opportunities for Xponential Fitness and Leef Brands
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xponential and Leef is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands 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 Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Leef Brands go up and down completely randomly.
Pair Corralation between Xponential Fitness and Leef Brands
Given the investment horizon of 90 days Xponential Fitness is expected to generate 8.93 times less return on investment than Leef Brands. But when comparing it to its historical volatility, Xponential Fitness is 2.47 times less risky than Leef Brands. It trades about 0.01 of its potential returns per unit of risk. Leef Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Leef Brands on September 3, 2024 and sell it today you would lose (41.00) from holding Leef Brands or give up 73.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Leef Brands
Performance |
| Timeline |
| Xponential Fitness |
| Leef Brands |
Xponential Fitness and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Leef Brands
The main advantage of trading using opposite Xponential Fitness and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Mattel Inc | Xponential Fitness vs. OneSpaWorld Holdings |
| Leef Brands vs. Teleflex Incorporated | Leef Brands vs. Viemed Healthcare | Leef Brands vs. Xponential Fitness | Leef Brands vs. Starbucks |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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