Correlation Between Ispire Technology and Planet Fitness

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

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

Diversification Opportunities for Ispire Technology and Planet Fitness

-0.35

Correlation Coefficient

Ispire Technology  Planet Fitness

Very good diversification

The 3 months correlation between Ispire and Planet is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Ispire Technology 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 Ispire Technology Common 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 Ispire Technology i.e., Ispire Technology and Planet Fitness go up and down completely randomly.

Pair Corralation between Ispire Technology and Planet Fitness

Given the investment horizon of 90 days Ispire Technology Common is expected to under-perform the Planet Fitness. In addition to that, Ispire Technology is 2.23 times more volatile than Planet Fitness. It trades about -0.09 of its total potential returns per unit of risk. Planet Fitness is currently generating about -0.06 per unit of volatility. If you would invest  10,153  in Planet Fitness on September 23, 2024 and sell it today you would lose (227.00) from holding Planet Fitness or give up 2.24% of portfolio value over 90 days.

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

Ispire Technology Common  vs.  Planet Fitness

Ispire Technology Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ispire Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Planet Fitness

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ispire Technology and Planet Fitness

The main advantage of trading using opposite Ispire Technology and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ispire Technology 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 Ispire Technology Common 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 Stocks Directory module to find actively traded stocks across global markets.