Correlation Between MW Investment and Planet Fitness

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

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

Diversification Opportunities for MW Investment and Planet Fitness

0.0

Correlation Coefficient

MW Investment  Planet Fitness

Pay attention - limited upside

The 3 months correlation between MEGH and Planet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MW Investment Holding and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and MW Investment 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 MW Investment Holding 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 MW Investment i.e., MW Investment and Planet Fitness go up and down completely randomly.

Pair Corralation between MW Investment and Planet Fitness

If you would invest  10,017  in Planet Fitness on October 11, 2024 and sell it today you would earn a total of  51.00  from holding Planet Fitness or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

MW Investment Holding  vs.  Planet Fitness

MW Investment Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Planet Fitness

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MW Investment and Planet Fitness

The main advantage of trading using opposite MW Investment and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Investment 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 MW Investment Holding 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.