Correlation Between Vitec Software and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Vitec Software 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 Vitec Software and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and Planet Fitness Cl, you can compare the effects of market volatilities on Vitec Software 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 Vitec Software with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and Planet Fitness.
Diversification Opportunities for Vitec Software and Planet Fitness
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vitec and Planet is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group 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 Vitec Software 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 Vitec Software Group 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 Vitec Software i.e., Vitec Software and Planet Fitness go up and down completely randomly.
Pair Corralation between Vitec Software and Planet Fitness
Assuming the 90 days trading horizon Vitec Software is expected to generate 1.86 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, Vitec Software Group is 1.51 times less risky than Planet Fitness. It trades about 0.2 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 7,855 in Planet Fitness Cl on October 6, 2024 and sell it today you would earn a total of 2,168 from holding Planet Fitness Cl or generate 27.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.56% |
Values | Daily Returns |
Vitec Software Group vs. Planet Fitness Cl
Performance |
Timeline |
Vitec Software Group |
Planet Fitness Cl |
Vitec Software and Planet Fitness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vitec Software and Planet Fitness
The main advantage of trading using opposite Vitec Software and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software 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.Vitec Software vs. St Galler Kantonalbank | Vitec Software vs. Compal Electronics GDR | Vitec Software vs. Atresmedia | Vitec Software vs. Regions Financial Corp |
Planet Fitness vs. Chocoladefabriken Lindt Spruengli | Planet Fitness vs. National Atomic Co | Planet Fitness vs. OTP Bank Nyrt | Planet Fitness vs. Samsung Electronics Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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