Correlation Between CODERE ONLINE and Planet Fitness

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

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

Diversification Opportunities for CODERE ONLINE and Planet Fitness

-0.47

Correlation Coefficient

CODERE ONLINE  Planet Fitness

Very good diversification

The 3 months correlation between CODERE and Planet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and CODERE ONLINE 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 CODERE ONLINE LUX 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 CODERE ONLINE i.e., CODERE ONLINE and Planet Fitness go up and down completely randomly.

Pair Corralation between CODERE ONLINE and Planet Fitness

Assuming the 90 days horizon CODERE ONLINE LUX is expected to generate 1.34 times more return on investment than Planet Fitness. However, CODERE ONLINE is 1.34 times more volatile than Planet Fitness. It trades about 0.0 of its potential returns per unit of risk. Planet Fitness is currently generating about -0.04 per unit of risk. If you would invest  660.00  in CODERE ONLINE LUX on December 20, 2024 and sell it today you would lose (20.00) from holding CODERE ONLINE LUX or give up 3.03% of portfolio value over 90 days.

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

CODERE ONLINE LUX  vs.  Planet Fitness

CODERE ONLINE LUX

Risk-Adjusted Performance

Very Weak

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

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. Despite nearly stable basic indicators, Planet Fitness is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CODERE ONLINE and Planet Fitness

The main advantage of trading using opposite CODERE ONLINE and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CODERE ONLINE 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 CODERE ONLINE LUX 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.