Correlation Between Xponential Fitness and Reitar Logtech

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

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

Diversification Opportunities for Xponential Fitness and Reitar Logtech

-0.39

Correlation Coefficient

Xponential Fitness  Reitar Logtech

Very good diversification

The 3 months correlation between Xponential and Reitar is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Reitar Logtech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitar Logtech Holdings 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 Reitar Logtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitar Logtech Holdings has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Reitar Logtech go up and down completely randomly.

Pair Corralation between Xponential Fitness and Reitar Logtech

Given the investment horizon of 90 days Xponential Fitness is expected to generate 645.2 times less return on investment than Reitar Logtech. But when comparing it to its historical volatility, Xponential Fitness is 19.89 times less risky than Reitar Logtech. It trades about 0.0 of its potential returns per unit of risk. Reitar Logtech Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Reitar Logtech Holdings on October 4, 2024 and sell it today you would earn a total of  374.00  from holding Reitar Logtech Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	18.79%
Values	Daily Returns

Xponential Fitness  vs.  Reitar Logtech Holdings

Xponential Fitness

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Xponential Fitness may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Reitar Logtech Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Reitar Logtech Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reitar Logtech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xponential Fitness and Reitar Logtech

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

The idea behind Xponential Fitness and Reitar Logtech Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.