Correlation Between Xponential Fitness and Universal Music
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Universal Music 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 Universal Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Universal Music Group, you can compare the effects of market volatilities on Xponential Fitness and Universal Music 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 Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Universal Music.
Diversification Opportunities for Xponential Fitness and Universal Music
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xponential and Universal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group 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 Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Universal Music go up and down completely randomly.
Pair Corralation between Xponential Fitness and Universal Music
Given the investment horizon of 90 days Xponential Fitness is expected to generate 2.05 times more return on investment than Universal Music. However, Xponential Fitness is 2.05 times more volatile than Universal Music Group. It trades about 0.1 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.06 per unit of risk. If you would invest 921.00 in Xponential Fitness on September 1, 2024 and sell it today you would earn a total of 603.00 from holding Xponential Fitness or generate 65.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xponential Fitness vs. Universal Music Group
Performance |
| Timeline |
| Xponential Fitness |
| Universal Music Group |
Xponential Fitness and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Universal Music
The main advantage of trading using opposite Xponential Fitness and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| Xponential Fitness vs. The Wendys Co | Xponential Fitness vs. Shake Shack | Xponential Fitness vs. Papa Johns International | Xponential Fitness vs. Darden Restaurants |
| Universal Music vs. Thunderbird Entertainment Group | Universal Music vs. Warner Music Group | Universal Music vs. Live Nation Entertainment | Universal Music vs. Atlanta Braves 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |