Correlation Between Xponential Fitness and Relx PLC
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Relx PLC 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 Relx PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Relx PLC ADR, you can compare the effects of market volatilities on Xponential Fitness and Relx PLC 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 Relx PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Relx PLC.
Diversification Opportunities for Xponential Fitness and Relx PLC
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xponential and Relx is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Relx PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relx PLC ADR 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 Relx PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relx PLC ADR has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Relx PLC go up and down completely randomly.
Pair Corralation between Xponential Fitness and Relx PLC
Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Relx PLC. In addition to that, Xponential Fitness is 2.54 times more volatile than Relx PLC ADR. It trades about -0.13 of its total potential returns per unit of risk. Relx PLC ADR is currently generating about 0.08 per unit of volatility. If you would invest 4,659 in Relx PLC ADR on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Relx PLC ADR or generate 1.85% 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. Relx PLC ADR
Performance |
| Timeline |
| Xponential Fitness |
| Relx PLC ADR |
Xponential Fitness and Relx PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Relx PLC
The main advantage of trading using opposite Xponential Fitness and Relx PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Relx PLC 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 Relx PLC will offset losses from the drop in Relx PLC's long position.The idea behind Xponential Fitness and Relx PLC ADR 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.| Relx PLC vs. Maximus | Relx PLC vs. CBIZ Inc | Relx PLC vs. First Advantage Corp | Relx PLC vs. Network 1 Technologies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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