Correlation Between Xponential Fitness and Mattel

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

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

Diversification Opportunities for Xponential Fitness and Mattel

0.02

Correlation Coefficient

Xponential Fitness  Mattel

Significant diversification

The 3 months correlation between Xponential and Mattel is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel 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 Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Mattel go up and down completely randomly.

Pair Corralation between Xponential Fitness and Mattel

Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Mattel. In addition to that, Xponential Fitness is 2.83 times more volatile than Mattel Inc. It trades about -0.08 of its total potential returns per unit of risk. Mattel Inc is currently generating about 0.07 per unit of volatility. If you would invest  1,768  in Mattel Inc on December 30, 2024 and sell it today you would earn a total of  162.00  from holding Mattel Inc or generate 9.16% return on investment over 90 days.

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

Xponential Fitness  vs.  Mattel Inc

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Mattel Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Mattel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Xponential Fitness and Mattel

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

The idea behind Xponential Fitness and Mattel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.