Correlation Between Planet Fitness and TR Property
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and TR Property 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 TR Property 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 TR Property Investment, you can compare the effects of market volatilities on Planet Fitness and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and TR Property.
Diversification Opportunities for Planet Fitness and TR Property
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and TRY is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Planet Fitness i.e., Planet Fitness and TR Property go up and down completely randomly.
Pair Corralation between Planet Fitness and TR Property
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 2.24 times more return on investment than TR Property. However, Planet Fitness is 2.24 times more volatile than TR Property Investment. It trades about 0.16 of its potential returns per unit of risk. TR Property Investment is currently generating about -0.09 per unit of risk. If you would invest 7,911 in Planet Fitness Cl on September 4, 2024 and sell it today you would earn a total of 1,996 from holding Planet Fitness Cl or generate 25.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.38% |
Values | Daily Returns |
Planet Fitness Cl vs. TR Property Investment
Performance |
Timeline |
Planet Fitness Cl |
TR Property Investment |
Planet Fitness and TR Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Fitness and TR Property
The main advantage of trading using opposite Planet Fitness and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property's long position.Planet Fitness vs. TR Property Investment | Planet Fitness vs. Aberdeen Diversified Income | Planet Fitness vs. Federal Realty Investment | Planet Fitness vs. Smithson Investment Trust |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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