Correlation Between Xponential Fitness and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Vodka Brands 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 Vodka Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Vodka Brands Corp, you can compare the effects of market volatilities on Xponential Fitness and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Vodka Brands.
Diversification Opportunities for Xponential Fitness and Vodka Brands
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xponential and Vodka is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Vodka Brands go up and down completely randomly.
Pair Corralation between Xponential Fitness and Vodka Brands
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.44 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, Xponential Fitness is 1.23 times less risky than Vodka Brands. It trades about 0.19 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Vodka Brands Corp on October 20, 2024 and sell it today you would earn a total of 23.00 from holding Vodka Brands Corp or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xponential Fitness vs. Vodka Brands Corp
Performance |
| Timeline |
| Xponential Fitness |
| Vodka Brands Corp |
Xponential Fitness and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xponential Fitness and Vodka Brands
The main advantage of trading using opposite Xponential Fitness and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | Xponential Fitness vs. OneSpaWorld Holdings |
| Vodka Brands vs. Brown Forman | Vodka Brands vs. Brown Forman | Vodka Brands vs. Eastside Distilling | Vodka Brands vs. Diageo PLC ADR |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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