Correlation Between Xponential Fitness and Brookfield Renewable

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

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

Diversification Opportunities for Xponential Fitness and Brookfield Renewable

0.61

Correlation Coefficient

Xponential Fitness  Brookfield Renewable

Poor diversification

The 3 months correlation between Xponential and Brookfield is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable 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 Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Xponential Fitness and Brookfield Renewable

Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Brookfield Renewable. In addition to that, Xponential Fitness is 12.35 times more volatile than Brookfield Renewable Partners. It trades about -0.09 of its total potential returns per unit of risk. Brookfield Renewable Partners is currently generating about -0.07 per unit of volatility. If you would invest  2,486  in Brookfield Renewable Partners on December 31, 2024 and sell it today you would lose (63.00) from holding Brookfield Renewable Partners or give up 2.53% of portfolio value over 90 days.

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

Xponential Fitness  vs.  Brookfield Renewable Partners

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 unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Brookfield Renewable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Renewable Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Brookfield Renewable is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Xponential Fitness and Brookfield Renewable

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

The idea behind Xponential Fitness and Brookfield Renewable Partners 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.