Correlation Between Xponential Fitness and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Olympic Steel 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 Olympic Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Olympic Steel, you can compare the effects of market volatilities on Xponential Fitness and Olympic Steel 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 Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Olympic Steel.
Diversification Opportunities for Xponential Fitness and Olympic Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xponential and Olympic is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel 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 Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Olympic Steel go up and down completely randomly.
Pair Corralation between Xponential Fitness and Olympic Steel
Given the investment horizon of 90 days Xponential Fitness is expected to generate 1.64 times more return on investment than Olympic Steel. However, Xponential Fitness is 1.64 times more volatile than Olympic Steel. It trades about 0.05 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.05 per unit of risk. If you would invest 1,259 in Xponential Fitness on September 24, 2024 and sell it today you would earn a total of 124.00 from holding Xponential Fitness or generate 9.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xponential Fitness vs. Olympic Steel
Performance |
Timeline |
Xponential Fitness |
Olympic Steel |
Xponential Fitness and Olympic Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xponential Fitness and Olympic Steel
The main advantage of trading using opposite Xponential Fitness and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel's long position.Xponential Fitness vs. Planet Fitness | Xponential Fitness vs. Bowlero Corp | Xponential Fitness vs. JAKKS Pacific | Xponential Fitness vs. Acushnet Holdings Corp |
Olympic Steel vs. Wheaton Precious Metals | Olympic Steel vs. Royal Gold | Olympic Steel vs. Gold Fields Ltd | Olympic Steel vs. SSR Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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