Correlation Between Xponential Fitness and Plby

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

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

Diversification Opportunities for Xponential Fitness and Plby

0.54

Correlation Coefficient

Xponential Fitness  Plby

Very weak diversification

The 3 months correlation between Xponential and Plby is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Plby Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plby Group 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 Plby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plby Group has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Plby go up and down completely randomly.

Pair Corralation between Xponential Fitness and Plby

Given the investment horizon of 90 days Xponential Fitness is expected to under-perform the Plby. But the stock apears to be less risky and, when comparing its historical volatility, Xponential Fitness is 1.87 times less risky than Plby. The stock trades about -0.03 of its potential returns per unit of risk. The Plby Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Plby Group on October 7, 2024 and sell it today you would lose (6.00) from holding Plby Group or give up 3.92% of portfolio value over 90 days.

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

Xponential Fitness  vs.  Plby Group

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.

Plby Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Plby Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Plby showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xponential Fitness and Plby

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

The idea behind Xponential Fitness and Plby Group 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.