Correlation Between Clarus Corp and Planet Fitness

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

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

Diversification Opportunities for Clarus Corp and Planet Fitness

0.21

Correlation Coefficient

Clarus Corp  Planet Fitness

Modest diversification

The 3 months correlation between Clarus and Planet is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Clarus Corp 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 Clarus Corp 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 Clarus Corp i.e., Clarus Corp and Planet Fitness go up and down completely randomly.

Pair Corralation between Clarus Corp and Planet Fitness

Given the investment horizon of 90 days Clarus Corp is expected to generate 1.43 times more return on investment than Planet Fitness. However, Clarus Corp is 1.43 times more volatile than Planet Fitness. It trades about 0.04 of its potential returns per unit of risk. Planet Fitness is currently generating about -0.08 per unit of risk. If you would invest  454.00  in Clarus Corp on November 28, 2024 and sell it today you would earn a total of  19.00  from holding Clarus Corp or generate 4.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Clarus Corp  vs.  Planet Fitness

Clarus Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clarus Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Clarus Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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 latest inconsistent 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 Clarus Corp and Planet Fitness

The main advantage of trading using opposite Clarus Corp and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarus Corp 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 Clarus Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.