Correlation Between Xponential Fitness and Hilton Grand

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

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

Diversification Opportunities for Xponential Fitness and Hilton Grand

0.79

Correlation Coefficient

Xponential Fitness  Hilton Grand

Poor diversification

The 3 months correlation between Xponential and Hilton is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Hilton Grand Vacations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Grand Vacations 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 Hilton Grand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Grand Vacations has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Hilton Grand go up and down completely randomly.

Pair Corralation between Xponential Fitness and Hilton Grand

Given the investment horizon of 90 days Xponential Fitness is expected to generate 2.15 times more return on investment than Hilton Grand. However, Xponential Fitness is 2.15 times more volatile than Hilton Grand Vacations. It trades about 0.08 of its potential returns per unit of risk. Hilton Grand Vacations is currently generating about 0.09 per unit of risk. If you would invest  1,266  in Xponential Fitness on September 2, 2024 and sell it today you would earn a total of  258.00  from holding Xponential Fitness or generate 20.38% return on investment over 90 days.

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

Xponential Fitness  vs.  Hilton Grand Vacations

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 unfluctuating basic indicators, Xponential Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

Hilton Grand Vacations

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Grand Vacations are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Hilton Grand may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Xponential Fitness and Hilton Grand

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

The idea behind Xponential Fitness and Hilton Grand Vacations 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.