Correlation Between Apple and Planet Fitness

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

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

Diversification Opportunities for Apple and Planet Fitness

-0.47

Correlation Coefficient

Apple  Planet Fitness

Very good diversification

The 3 months correlation between Apple and Planet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Planet Fitness go up and down completely randomly.

Pair Corralation between Apple and Planet Fitness

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.53 times more return on investment than Planet Fitness. However, Apple is 1.53 times more volatile than Planet Fitness Cl. It trades about 0.01 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about -0.05 per unit of risk. If you would invest  23,924  in Apple Inc on December 1, 2024 and sell it today you would lose (174.00) from holding Apple Inc or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Apple Inc  vs.  Planet Fitness Cl

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Planet Fitness Cl

Risk-Adjusted Performance

Very Weak

Over the last 90 days Planet Fitness Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Apple and Planet Fitness

The main advantage of trading using opposite Apple and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.