Correlation Between Schweiter Technologies and Planet Fitness

Can any of the company-specific risk be diversified away by investing in both Schweiter Technologies and Planet Fitness 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 Schweiter Technologies and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schweiter Technologies AG and Planet Fitness Cl, you can compare the effects of market volatilities on Schweiter Technologies and Planet Fitness 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 Schweiter Technologies with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweiter Technologies and Planet Fitness.

Diversification Opportunities for Schweiter Technologies and Planet Fitness

-0.02

Correlation Coefficient

Schweiter Technologies  Planet Fitness

Good diversification

The 3 months correlation between Schweiter and Planet is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Schweiter Technologies AG and Planet Fitness Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness Cl and Schweiter Technologies 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 Schweiter Technologies AG are associated (or correlated) with Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness Cl has no effect on the direction of Schweiter Technologies i.e., Schweiter Technologies and Planet Fitness go up and down completely randomly.

Pair Corralation between Schweiter Technologies and Planet Fitness

Assuming the 90 days trading horizon Schweiter Technologies is expected to generate 3.51 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, Schweiter Technologies AG is 1.0 times less risky than Planet Fitness. It trades about 0.04 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  8,171  in Planet Fitness Cl on September 16, 2024 and sell it today you would earn a total of  1,793  from holding Planet Fitness Cl or generate 21.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.97%
Values	Daily Returns

Schweiter Technologies AG  vs.  Planet Fitness Cl

Schweiter Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schweiter Technologies AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Planet Fitness Cl

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness Cl are ranked lower than 11 (%) 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.

Pair Trading with Schweiter Technologies and Planet Fitness

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

The idea behind Schweiter Technologies AG and Planet Fitness Cl 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.