Correlation Between Xponential Fitness and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Sweetgreen 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 Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Sweetgreen, you can compare the effects of market volatilities on Xponential Fitness and Sweetgreen 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 Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Sweetgreen.
Diversification Opportunities for Xponential Fitness and Sweetgreen
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xponential and Sweetgreen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Sweetgreen go up and down completely randomly.
Pair Corralation between Xponential Fitness and Sweetgreen
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.53 times more return on investment than Sweetgreen. However, Xponential Fitness is 1.53 times more volatile than Sweetgreen. It trades about 0.15 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.11 per unit of risk. If you would invest 1,259 in Xponential Fitness on August 30, 2024 and sell it today you would earn a total of 262.00 from holding Xponential Fitness or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xponential Fitness vs. Sweetgreen
Performance |
| Timeline |
| Xponential Fitness |
| Sweetgreen |
Xponential Fitness and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Sweetgreen
The main advantage of trading using opposite Xponential Fitness and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen's long position.| Xponential Fitness vs. Chipotle Mexican Grill | Xponential Fitness vs. Yum Brands | Xponential Fitness vs. The Wendys Co | Xponential Fitness vs. McDonalds |
| Sweetgreen vs. Chipotle Mexican Grill | Sweetgreen vs. Yum Brands | Sweetgreen vs. The Wendys Co | Sweetgreen vs. McDonalds |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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