Correlation Between Captivision Ordinary and Planet Fitness

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

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

Diversification Opportunities for Captivision Ordinary and Planet Fitness

-0.14

Correlation Coefficient

Captivision Ordinary  Planet Fitness

Good diversification

The 3 months correlation between Captivision and Planet is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Captivision Ordinary Shares and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Captivision Ordinary 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 Captivision Ordinary Shares 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 has no effect on the direction of Captivision Ordinary i.e., Captivision Ordinary and Planet Fitness go up and down completely randomly.

Pair Corralation between Captivision Ordinary and Planet Fitness

Given the investment horizon of 90 days Captivision Ordinary Shares is expected to generate 9.83 times more return on investment than Planet Fitness. However, Captivision Ordinary is 9.83 times more volatile than Planet Fitness. It trades about 0.05 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.01 per unit of risk. If you would invest  70.00  in Captivision Ordinary Shares on December 22, 2024 and sell it today you would lose (12.00) from holding Captivision Ordinary Shares or give up 17.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Captivision Ordinary Shares  vs.  Planet Fitness

Captivision Ordinary

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Captivision Ordinary Shares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Captivision Ordinary unveiled solid returns over the last few months and may actually be approaching a breakup point.

Planet Fitness

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Captivision Ordinary and Planet Fitness

The main advantage of trading using opposite Captivision Ordinary and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Captivision Ordinary 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 Captivision Ordinary Shares and Planet Fitness 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.