Correlation Between HONEYWELL and Xponential Fitness

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

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

Diversification Opportunities for HONEYWELL and Xponential Fitness

-0.22

Correlation Coefficient

HONEYWELL  Xponential Fitness

Very good diversification

The 3 months correlation between HONEYWELL and Xponential is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HONEYWELL INTERNATIONAL INC and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and HONEYWELL 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 HONEYWELL INTERNATIONAL 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 HONEYWELL i.e., HONEYWELL and Xponential Fitness go up and down completely randomly.

Pair Corralation between HONEYWELL and Xponential Fitness

Assuming the 90 days trading horizon HONEYWELL INTERNATIONAL INC is expected to under-perform the Xponential Fitness. But the bond apears to be less risky and, when comparing its historical volatility, HONEYWELL INTERNATIONAL INC is 8.15 times less risky than Xponential Fitness. The bond trades about -0.18 of its potential returns per unit of risk. The Xponential Fitness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,205  in Xponential Fitness on October 12, 2024 and sell it today you would earn a total of  263.00  from holding Xponential Fitness or generate 21.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

HONEYWELL INTERNATIONAL INC  vs.  Xponential Fitness

HONEYWELL INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HONEYWELL INTERNATIONAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HONEYWELL INTERNATIONAL INC investors.

Xponential Fitness

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 6 (%) 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 HONEYWELL and Xponential Fitness

The main advantage of trading using opposite HONEYWELL and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HONEYWELL 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 HONEYWELL INTERNATIONAL 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.