Correlation Between Consolidated Communications and Xponential Fitness

Can any of the company-specific risk be diversified away by investing in both Consolidated Communications and Xponential Fitness 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 Consolidated Communications and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Consolidated Communications and Xponential Fitness, you can compare the effects of market volatilities on Consolidated Communications and Xponential Fitness 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 Consolidated Communications with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and Xponential Fitness.

Diversification Opportunities for Consolidated Communications and Xponential Fitness

-0.29

Correlation Coefficient

Consolidated Communications  Xponential Fitness

Very good diversification

The 3 months correlation between Consolidated and Xponential is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Consolidated Communications 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 Consolidated Communications are associated (or correlated) with Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Consolidated Communications i.e., Consolidated Communications and Xponential Fitness go up and down completely randomly.

Pair Corralation between Consolidated Communications and Xponential Fitness

Given the investment horizon of 90 days Consolidated Communications is expected to generate 75.48 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Consolidated Communications is 14.76 times less risky than Xponential Fitness. It trades about 0.06 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  950.00  in Xponential Fitness on March 29, 2024 and sell it today you would earn a total of  589.00  from holding Xponential Fitness or generate 62.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Consolidated Communications  vs.  Xponential Fitness

Consolidated Communications

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Consolidated Communications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Consolidated Communications is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Xponential Fitness

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Xponential Fitness may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Consolidated Communications and Xponential Fitness

The main advantage of trading using opposite Consolidated Communications and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications position performs unexpectedly, Xponential Fitness 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 Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.

The idea behind Consolidated Communications and Xponential Fitness pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.