Correlation Between Planet Fitness and Sparebank
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Sparebank 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 Planet Fitness and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness Cl and Sparebank 1 SR, you can compare the effects of market volatilities on Planet Fitness and Sparebank 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 Planet Fitness with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Sparebank.
Diversification Opportunities for Planet Fitness and Sparebank
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Planet and Sparebank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Planet 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 Planet Fitness Cl are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Planet Fitness i.e., Planet Fitness and Sparebank go up and down completely randomly.
Pair Corralation between Planet Fitness and Sparebank
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 2.1 times more return on investment than Sparebank. However, Planet Fitness is 2.1 times more volatile than Sparebank 1 SR. It trades about 0.07 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.07 per unit of risk. If you would invest 7,383 in Planet Fitness Cl on October 9, 2024 and sell it today you would earn a total of 2,562 from holding Planet Fitness Cl or generate 34.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.37% |
Values | Daily Returns |
Planet Fitness Cl vs. Sparebank 1 SR
Performance |
Timeline |
Planet Fitness Cl |
Sparebank 1 SR |
Planet Fitness and Sparebank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Fitness and Sparebank
The main advantage of trading using opposite Planet Fitness and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.Planet Fitness vs. Alien Metals | Planet Fitness vs. Finnair Oyj | Planet Fitness vs. Systemair AB | Planet Fitness vs. Empire Metals Limited |
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Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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