Correlation Between Lexeo Therapeutics, and Xponential Fitness

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

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

Diversification Opportunities for Lexeo Therapeutics, and Xponential Fitness

-0.53

Correlation Coefficient

Lexeo Therapeutics,  Xponential Fitness

Excellent diversification

The 3 months correlation between Lexeo and Xponential is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lexeo Therapeutics, Common and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Lexeo Therapeutics, 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 Lexeo Therapeutics, Common 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 Lexeo Therapeutics, i.e., Lexeo Therapeutics, and Xponential Fitness go up and down completely randomly.

Pair Corralation between Lexeo Therapeutics, and Xponential Fitness

Given the investment horizon of 90 days Lexeo Therapeutics, Common is expected to under-perform the Xponential Fitness. In addition to that, Lexeo Therapeutics, is 1.57 times more volatile than Xponential Fitness. It trades about -0.24 of its total potential returns per unit of risk. Xponential Fitness is currently generating about -0.01 per unit of volatility. If you would invest  1,524  in Xponential Fitness on November 28, 2024 and sell it today you would lose (95.00) from holding Xponential Fitness or give up 6.23% of portfolio value over 90 days.

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

Lexeo Therapeutics, Common  vs.  Xponential Fitness

Lexeo Therapeutics,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lexeo Therapeutics, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Xponential Fitness

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xponential Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xponential Fitness is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lexeo Therapeutics, and Xponential Fitness

The main advantage of trading using opposite Lexeo Therapeutics, and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexeo Therapeutics, 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 Lexeo Therapeutics, Common 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.