Correlation Between LENSAR and Planet Fitness

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

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

Diversification Opportunities for LENSAR and Planet Fitness

-0.34

Correlation Coefficient

LENSAR  Planet Fitness

Very good diversification

The 3 months correlation between LENSAR and Planet is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and LENSAR 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 LENSAR Inc 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 LENSAR i.e., LENSAR and Planet Fitness go up and down completely randomly.

Pair Corralation between LENSAR and Planet Fitness

Given the investment horizon of 90 days LENSAR Inc is expected to generate 2.94 times more return on investment than Planet Fitness. However, LENSAR is 2.94 times more volatile than Planet Fitness. It trades about 0.23 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.01 per unit of risk. If you would invest  750.00  in LENSAR Inc on December 19, 2024 and sell it today you would earn a total of  806.00  from holding LENSAR Inc or generate 107.47% return on investment over 90 days.

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

LENSAR Inc  vs.  Planet Fitness

LENSAR Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LENSAR reported 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 LENSAR and Planet Fitness

The main advantage of trading using opposite LENSAR and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR 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 LENSAR Inc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.