Correlation Between Aberdeen Diversified and Planet Fitness

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

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

Diversification Opportunities for Aberdeen Diversified and Planet Fitness

0.13

Correlation Coefficient

Aberdeen Diversified  Planet Fitness

Average diversification

The 3 months correlation between Aberdeen and Planet is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income 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 Aberdeen Diversified 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 Aberdeen Diversified Income 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 Aberdeen Diversified i.e., Aberdeen Diversified and Planet Fitness go up and down completely randomly.

Pair Corralation between Aberdeen Diversified and Planet Fitness

Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.57 times more return on investment than Planet Fitness. However, Aberdeen Diversified Income is 1.76 times less risky than Planet Fitness. It trades about 0.1 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about -0.08 per unit of risk. If you would invest  4,450  in Aberdeen Diversified Income on December 2, 2024 and sell it today you would earn a total of  230.00  from holding Aberdeen Diversified Income or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.86%
Values	Daily Returns

Aberdeen Diversified Income  vs.  Planet Fitness Cl

Aberdeen Diversified

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aberdeen Diversified may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 Aberdeen Diversified and Planet Fitness

The main advantage of trading using opposite Aberdeen Diversified and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified 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 Aberdeen Diversified Income 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.