Correlation Between Xponential Fitness and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Ross Stores, you can compare the effects of market volatilities on Xponential Fitness and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Ross Stores.
Diversification Opportunities for Xponential Fitness and Ross Stores
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xponential and Ross is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Ross Stores go up and down completely randomly.
Pair Corralation between Xponential Fitness and Ross Stores
Given the investment horizon of 90 days Xponential Fitness is expected to generate 3.97 times more return on investment than Ross Stores. However, Xponential Fitness is 3.97 times more volatile than Ross Stores. It trades about 0.15 of its potential returns per unit of risk. Ross Stores is currently generating about 0.21 per unit of risk. If you would invest 1,249 in Xponential Fitness on August 29, 2024 and sell it today you would earn a total of 272.00 from holding Xponential Fitness or generate 21.78% 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. Ross Stores
Performance |
| Timeline |
| Xponential Fitness |
| Ross Stores |
Xponential Fitness and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Ross Stores
The main advantage of trading using opposite Xponential Fitness and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Xponential Fitness vs. Bowlero Corp | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | Xponential Fitness vs. OneSpaWorld Holdings |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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