Correlation Between Xponential Fitness and European Wax
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and European Wax 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 European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and European Wax Center, you can compare the effects of market volatilities on Xponential Fitness and European Wax 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 European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and European Wax.
Diversification Opportunities for Xponential Fitness and European Wax
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xponential and European is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and European Wax Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Wax Center 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 European Wax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Wax Center has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and European Wax go up and down completely randomly.
Pair Corralation between Xponential Fitness and European Wax
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.07 times more return on investment than European Wax. However, Xponential Fitness is 1.07 times more volatile than European Wax Center. It trades about 0.06 of its potential returns per unit of risk. European Wax Center is currently generating about -0.08 per unit of risk. If you would invest 1,220 in Xponential Fitness on September 25, 2024 and sell it today you would earn a total of 163.00 from holding Xponential Fitness or generate 13.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Xponential Fitness vs. European Wax Center
Performance |
Timeline |
Xponential Fitness |
European Wax Center |
Xponential Fitness and European Wax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xponential Fitness and European Wax
The main advantage of trading using opposite Xponential Fitness and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, European Wax 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 European Wax will offset losses from the drop in European Wax's long position.Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp | Xponential Fitness vs. OneSpaWorld Holdings |
European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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