Correlation Between Planet Fitness and WESANA HEALTH

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

By analyzing existing cross correlation between Planet Fitness and WESANA HEALTH HOLD, you can compare the effects of market volatilities on Planet Fitness and WESANA HEALTH 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 WESANA HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and WESANA HEALTH.

Diversification Opportunities for Planet Fitness and WESANA HEALTH

0.38

Correlation Coefficient

Planet Fitness  WESANA HEALTH

Weak diversification

The 3 months correlation between Planet and WESANA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and WESANA HEALTH HOLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESANA HEALTH HOLD 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 are associated (or correlated) with WESANA HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESANA HEALTH HOLD has no effect on the direction of Planet Fitness i.e., Planet Fitness and WESANA HEALTH go up and down completely randomly.

Pair Corralation between Planet Fitness and WESANA HEALTH

If you would invest  9,350  in Planet Fitness on October 8, 2024 and sell it today you would earn a total of  350.00  from holding Planet Fitness or generate 3.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Planet Fitness  vs.  WESANA HEALTH HOLD

Planet Fitness

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Planet Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

WESANA HEALTH HOLD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESANA HEALTH HOLD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WESANA HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Planet Fitness and WESANA HEALTH

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

The idea behind Planet Fitness and WESANA HEALTH HOLD 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.