Correlation Between Xponential Fitness and Chevron Corp

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Can any of the company-specific risk be diversified away by investing in both Xponential Fitness and Chevron Corp 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 Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xponential Fitness and Chevron Corp, you can compare the effects of market volatilities on Xponential Fitness and Chevron Corp 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 Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xponential Fitness and Chevron Corp.

Diversification Opportunities for Xponential Fitness and Chevron Corp

  Correlation Coefficient

Very good diversification

The 3 months correlation between Xponential and Chevron is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xponential Fitness and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp 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 Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Xponential Fitness i.e., Xponential Fitness and Chevron Corp go up and down completely randomly.

Pair Corralation between Xponential Fitness and Chevron Corp

Given the investment horizon of 90 days Xponential Fitness is expected to generate 7.36 times more return on investment than Chevron Corp. However, Xponential Fitness is 7.36 times more volatile than Chevron Corp. It trades about 0.36 of its potential returns per unit of risk. Chevron Corp is currently generating about -0.2 per unit of risk. If you would invest  851.00  in Xponential Fitness on March 21, 2024 and sell it today you would earn a total of  654.00  from holding Xponential Fitness or generate 76.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Xponential Fitness  vs.  Chevron Corp

Xponential Fitness 

Risk-Adjusted Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Xponential Fitness are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Xponential Fitness reported solid returns over the last few months and may actually be approaching a breakup point.
Chevron Corp 

Risk-Adjusted Performance

0 of 100

Very Weak
Over the last 90 days Chevron Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chevron Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Xponential Fitness and Chevron Corp Volatility Contrast

   Predicted Return Density   

Pair Trading with Xponential Fitness and Chevron Corp

The main advantage of trading using opposite Xponential Fitness and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xponential Fitness position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.
The idea behind Xponential Fitness and Chevron Corp 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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