Correlation Between Planet Fitness and Hollywood Bowl

Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Planet Fitness and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Hollywood Bowl.

Diversification Opportunities for Planet Fitness and Hollywood Bowl

-0.41

Correlation Coefficient

Planet Fitness  Hollywood Bowl

Very good diversification

The 3 months correlation between Planet and Hollywood is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Planet Fitness i.e., Planet Fitness and Hollywood Bowl go up and down completely randomly.

Pair Corralation between Planet Fitness and Hollywood Bowl

Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.29 times more return on investment than Hollywood Bowl. However, Planet Fitness is 1.29 times more volatile than Hollywood Bowl Group. It trades about 0.2 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.12 per unit of risk. If you would invest  7,992  in Planet Fitness Cl on October 22, 2024 and sell it today you would earn a total of  2,552  from holding Planet Fitness Cl or generate 31.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Planet Fitness Cl  vs.  Hollywood Bowl Group

Planet Fitness Cl

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness Cl are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Hollywood Bowl Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Planet Fitness and Hollywood Bowl

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

The idea behind Planet Fitness Cl and Hollywood Bowl 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.