Correlation Between Xponential Fitness and Sea
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Sea, you can compare the effects of market volatilities on Xponential Fitness and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Sea.
Diversification Opportunities for Xponential Fitness and Sea
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xponential and Sea is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Sea go up and down completely randomly.
Pair Corralation between Xponential Fitness and Sea
Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Sea. In addition to that, Xponential Fitness is 1.65 times more volatile than Sea. It trades about 0.0 of its total potential returns per unit of risk. Sea is currently generating about 0.04 per unit of volatility. If you would invest 8,353 in Sea on November 27, 2024 and sell it today you would earn a total of 4,366 from holding Sea or generate 52.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Sea
Performance |
| Timeline |
| Xponential Fitness |
| Sea |
Xponential Fitness and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Sea
The main advantage of trading using opposite Xponential Fitness and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | Xponential Fitness vs. OneSpaWorld Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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