Correlation Between Xponential Fitness and Chiba Bank

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

By analyzing existing cross correlation between Xponential Fitness and Chiba Bank Ltd, you can compare the effects of market volatilities on Xponential Fitness and Chiba Bank 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 Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Chiba Bank.

Diversification Opportunities for Xponential Fitness and Chiba Bank

-0.25

Correlation Coefficient

Xponential Fitness  Chiba Bank

Very good diversification

The 3 months correlation between Xponential and Chiba is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank 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 Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Chiba Bank go up and down completely randomly.

Pair Corralation between Xponential Fitness and Chiba Bank

Given the investment horizon of 90 days Xponential Fitness is expected to generate 3.44 times more return on investment than Chiba Bank. However, Xponential Fitness is 3.44 times more volatile than Chiba Bank Ltd. It trades about 0.04 of its potential returns per unit of risk. Chiba Bank Ltd is currently generating about 0.02 per unit of risk. If you would invest  1,200  in Xponential Fitness on September 20, 2024 and sell it today you would earn a total of  225.00  from holding Xponential Fitness or generate 18.75% 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.  Chiba Bank Ltd

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.

Chiba Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chiba Bank Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Chiba Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xponential Fitness and Chiba Bank

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

The idea behind Xponential Fitness and Chiba Bank Ltd 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 Commodity Directory module to find actively traded commodities issued by global exchanges.