Correlation Between F45 Training and Vista Outdoor

Can any of the company-specific risk be diversified away by investing in both F45 Training and Vista Outdoor 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 F45 Training and Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between F45 Training Holdings and Vista Outdoor, you can compare the effects of market volatilities on F45 Training and Vista Outdoor 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 F45 Training with a short position of Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of F45 Training and Vista Outdoor.

Diversification Opportunities for F45 Training and Vista Outdoor

0.0

Correlation Coefficient

F45 Training  Vista Outdoor

Pay attention - limited upside

The 3 months correlation between F45 and Vista is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding F45 Training Holdings and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor and F45 Training 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 F45 Training Holdings are associated (or correlated) with Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of F45 Training i.e., F45 Training and Vista Outdoor go up and down completely randomly.

Pair Corralation between F45 Training and Vista Outdoor

Given the investment horizon of 90 days F45 Training Holdings is expected to under-perform the Vista Outdoor. In addition to that, F45 Training is 2.32 times more volatile than Vista Outdoor. It trades about -0.24 of its total potential returns per unit of risk. Vista Outdoor is currently generating about 0.06 per unit of volatility. If you would invest  2,686  in Vista Outdoor on October 3, 2024 and sell it today you would earn a total of  1,777  from holding Vista Outdoor or generate 66.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	24.78%
Values	Daily Returns

F45 Training Holdings  vs.  Vista Outdoor

F45 Training Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days F45 Training Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, F45 Training is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Vista Outdoor

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Vista Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Vista Outdoor displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with F45 Training and Vista Outdoor

The main advantage of trading using opposite F45 Training and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F45 Training position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.

The idea behind F45 Training Holdings and Vista Outdoor 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.