Correlation Between Xponential Fitness and SunOpta
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and SunOpta 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 SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and SunOpta, you can compare the effects of market volatilities on Xponential Fitness and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and SunOpta.
Diversification Opportunities for Xponential Fitness and SunOpta
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xponential and SunOpta is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and SunOpta go up and down completely randomly.
Pair Corralation between Xponential Fitness and SunOpta
Given the investment horizon of 90 days Xponential Fitness is expected to generate 3.21 times more return on investment than SunOpta. However, Xponential Fitness is 3.21 times more volatile than SunOpta. It trades about 0.16 of its potential returns per unit of risk. SunOpta is currently generating about 0.32 per unit of risk. If you would invest 1,261 in Xponential Fitness on September 3, 2024 and sell it today you would earn a total of 263.00 from holding Xponential Fitness or generate 20.86% 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. SunOpta
Performance |
| Timeline |
| Xponential Fitness |
| SunOpta |
Xponential Fitness and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and SunOpta
The main advantage of trading using opposite Xponential Fitness and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Mattel Inc | Xponential Fitness vs. OneSpaWorld Holdings |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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