Correlation Between Weyco and Xponential Fitness

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

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

Diversification Opportunities for Weyco and Xponential Fitness

0.58

Correlation Coefficient

Weyco  Xponential Fitness

Very weak diversification

The 3 months correlation between Weyco and Xponential is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Xponential Fitness go up and down completely randomly.

Pair Corralation between Weyco and Xponential Fitness

Given the investment horizon of 90 days Weyco Group is expected to generate 0.58 times more return on investment than Xponential Fitness. However, Weyco Group is 1.73 times less risky than Xponential Fitness. It trades about 0.06 of its potential returns per unit of risk. Xponential Fitness is currently generating about -0.14 per unit of risk. If you would invest  3,536  in Weyco Group on September 20, 2024 and sell it today you would earn a total of  81.00  from holding Weyco Group or generate 2.29% return on investment over 90 days.

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

Weyco Group  vs.  Xponential Fitness

Weyco Group

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

Xponential Fitness

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 3 (%) 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 Weyco and Xponential Fitness

The main advantage of trading using opposite Weyco and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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 Weyco Group 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.