Correlation Between Xponential Fitness and Learning Tree

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

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

Diversification Opportunities for Xponential Fitness and Learning Tree

0.4

Correlation Coefficient

Xponential Fitness  Learning Tree

Very weak diversification

The 3 months correlation between Xponential and Learning is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Learning Tree International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning Tree Intern 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 Learning Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Tree Intern has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Learning Tree go up and down completely randomly.

Pair Corralation between Xponential Fitness and Learning Tree

If you would invest  1,253  in Xponential Fitness on September 4, 2024 and sell it today you would earn a total of  297.00  from holding Xponential Fitness or generate 23.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Xponential Fitness  vs.  Learning Tree International

Xponential Fitness

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Xponential Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

Learning Tree Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Learning Tree International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Learning Tree is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Xponential Fitness and Learning Tree

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

The idea behind Xponential Fitness and Learning Tree International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.