Correlation Between Xponential Fitness and JJill

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

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

Diversification Opportunities for Xponential Fitness and JJill

0.59

Correlation Coefficient

Xponential Fitness  JJill

Very weak diversification

The 3 months correlation between Xponential and JJill is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc 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 JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and JJill go up and down completely randomly.

Pair Corralation between Xponential Fitness and JJill

Given the investment horizon of 90 days Xponential Fitness is expected to generate 2.14 times more return on investment than JJill. However, Xponential Fitness is 2.14 times more volatile than JJill Inc. It trades about 0.09 of its potential returns per unit of risk. JJill Inc is currently generating about 0.08 per unit of risk. If you would invest  1,281  in Xponential Fitness on October 21, 2024 and sell it today you would earn a total of  286.00  from holding Xponential Fitness or generate 22.33% return on investment over 90 days.

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

Xponential Fitness  vs.  JJill Inc

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.

JJill Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, JJill may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xponential Fitness and JJill

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

The idea behind Xponential Fitness and JJill Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..