Correlation Between Xponential Fitness and MSP Recovery
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and MSP Recovery 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 MSP Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and MSP Recovery, you can compare the effects of market volatilities on Xponential Fitness and MSP Recovery 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 MSP Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and MSP Recovery.
Diversification Opportunities for Xponential Fitness and MSP Recovery
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xponential and MSP is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and MSP Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSP Recovery 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 MSP Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSP Recovery has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and MSP Recovery go up and down completely randomly.
Pair Corralation between Xponential Fitness and MSP Recovery
Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the MSP Recovery. But the stock apears to be less risky and, when comparing its historical volatility, Xponential Fitness is 27.31 times less risky than MSP Recovery. The stock trades about 0.0 of its potential returns per unit of risk. The MSP Recovery is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 41.00 in MSP Recovery on August 30, 2024 and sell it today you would lose (30.00) from holding MSP Recovery or give up 73.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 47.97% |
| Values | Daily Returns |
Xponential Fitness vs. MSP Recovery
Performance |
| Timeline |
| Xponential Fitness |
| MSP Recovery |
Xponential Fitness and MSP Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and MSP Recovery
The main advantage of trading using opposite Xponential Fitness and MSP Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, MSP Recovery 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 MSP Recovery will offset losses from the drop in MSP Recovery's long position.| Xponential Fitness vs. Bowlero Corp | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | Xponential Fitness vs. OneSpaWorld Holdings |
| MSP Recovery vs. Willscot Mobile Mini | MSP Recovery vs. ATRenew Inc DRC | MSP Recovery vs. Coupang LLC | MSP Recovery vs. Avis Budget Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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