Correlation Between Planet Fitness and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Monks Investment 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 Monks Investment 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 Monks Investment Trust, you can compare the effects of market volatilities on Planet Fitness and Monks Investment 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 Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Monks Investment.
Diversification Opportunities for Planet Fitness and Monks Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Planet and Monks is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust 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 Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Planet Fitness i.e., Planet Fitness and Monks Investment go up and down completely randomly.
Pair Corralation between Planet Fitness and Monks Investment
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 2.93 times more return on investment than Monks Investment. However, Planet Fitness is 2.93 times more volatile than Monks Investment Trust. It trades about 0.15 of its potential returns per unit of risk. Monks Investment Trust is currently generating about 0.2 per unit of risk. If you would invest 8,329 in Planet Fitness Cl on September 13, 2024 and sell it today you would earn a total of 1,881 from holding Planet Fitness Cl or generate 22.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 96.88% |
Values | Daily Returns |
Planet Fitness Cl vs. Monks Investment Trust
Performance |
Timeline |
Planet Fitness Cl |
Monks Investment Trust |
Planet Fitness and Monks Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Fitness and Monks Investment
The main advantage of trading using opposite Planet Fitness and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.Planet Fitness vs. Bisichi Mining PLC | Planet Fitness vs. Endeavour Mining Corp | Planet Fitness vs. Liberty Media Corp | Planet Fitness vs. AcadeMedia AB |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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