Correlation Between Xponential Fitness and Camrova Resources

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

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

Diversification Opportunities for Xponential Fitness and Camrova Resources

-0.12

Correlation Coefficient

Xponential Fitness  Camrova Resources

Good diversification

The 3 months correlation between Xponential and Camrova is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Camrova Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camrova Resources 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 Camrova Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camrova Resources has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Camrova Resources go up and down completely randomly.

Pair Corralation between Xponential Fitness and Camrova Resources

Given the investment horizon of 90 days Xponential Fitness is expected to generate 0.28 times more return on investment than Camrova Resources. However, Xponential Fitness is 3.52 times less risky than Camrova Resources. It trades about -0.05 of its potential returns per unit of risk. Camrova Resources is currently generating about -0.13 per unit of risk. If you would invest  1,550  in Xponential Fitness on December 2, 2024 and sell it today you would lose (229.00) from holding Xponential Fitness or give up 14.77% of portfolio value over 90 days.

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

Xponential Fitness  vs.  Camrova Resources

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Camrova Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Camrova Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xponential Fitness and Camrova Resources

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

The idea behind Xponential Fitness and Camrova Resources 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 Valuation module to check real value of public entities based on technical and fundamental data.