Correlation Between Xponential Fitness and Lipocine

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

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

Diversification Opportunities for Xponential Fitness and Lipocine

0.35

Correlation Coefficient

Xponential Fitness  Lipocine

Weak diversification

The 3 months correlation between Xponential and Lipocine is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Lipocine go up and down completely randomly.

Pair Corralation between Xponential Fitness and Lipocine

Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Lipocine. In addition to that, Xponential Fitness is 1.68 times more volatile than Lipocine. It trades about -0.08 of its total potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of volatility. If you would invest  458.00  in Lipocine on December 30, 2024 and sell it today you would lose (130.00) from holding Lipocine or give up 28.38% of portfolio value over 90 days.

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

Xponential Fitness  vs.  Lipocine

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 uncertain performance in the last few months, the Stock's basic 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.

Lipocine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lipocine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Xponential Fitness and Lipocine

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

The idea behind Xponential Fitness and Lipocine 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.