Correlation Between Planet Fitness and ANTA Sports

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

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

Diversification Opportunities for Planet Fitness and ANTA Sports

-0.68

Correlation Coefficient

Planet Fitness  ANTA Sports

Excellent diversification

The 3 months correlation between Planet and ANTA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and Planet Fitness 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 Planet Fitness are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Planet Fitness i.e., Planet Fitness and ANTA Sports go up and down completely randomly.

Pair Corralation between Planet Fitness and ANTA Sports

Given the investment horizon of 90 days Planet Fitness is expected to generate 0.75 times more return on investment than ANTA Sports. However, Planet Fitness is 1.33 times less risky than ANTA Sports. It trades about 0.06 of its potential returns per unit of risk. ANTA Sports Products is currently generating about -0.34 per unit of risk. If you would invest  9,867  in Planet Fitness on October 8, 2024 and sell it today you would earn a total of  157.00  from holding Planet Fitness or generate 1.59% return on investment over 90 days.

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

Planet Fitness  vs.  ANTA Sports Products

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.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Planet Fitness and ANTA Sports

The main advantage of trading using opposite Planet Fitness and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, ANTA Sports 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 ANTA Sports will offset losses from the drop in ANTA Sports' long position.

The idea behind Planet Fitness and ANTA Sports Products 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.