Correlation Between RadNet and Xponential Fitness

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

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

Diversification Opportunities for RadNet and Xponential Fitness

0.91

Correlation Coefficient

RadNet  Xponential Fitness

Almost no diversification

The 3 months correlation between RadNet and Xponential is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and RadNet 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 RadNet Inc 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 RadNet i.e., RadNet and Xponential Fitness go up and down completely randomly.

Pair Corralation between RadNet and Xponential Fitness

Given the investment horizon of 90 days RadNet Inc is expected to generate 0.62 times more return on investment than Xponential Fitness. However, RadNet Inc is 1.61 times less risky than Xponential Fitness. It trades about -0.27 of its potential returns per unit of risk. Xponential Fitness is currently generating about -0.18 per unit of risk. If you would invest  8,147  in RadNet Inc on September 25, 2024 and sell it today you would lose (885.00) from holding RadNet Inc or give up 10.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

RadNet Inc  vs.  Xponential Fitness

RadNet Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RadNet Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, RadNet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Xponential Fitness

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Xponential Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RadNet and Xponential Fitness

The main advantage of trading using opposite RadNet and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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 RadNet Inc 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.