Correlation Between Planet Fitness and Chanson International

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

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

Diversification Opportunities for Planet Fitness and Chanson International

-0.83

Correlation Coefficient

Planet Fitness  Chanson International

Pay attention - limited upside

The 3 months correlation between Planet and Chanson is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Chanson International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chanson International 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 Chanson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chanson International has no effect on the direction of Planet Fitness i.e., Planet Fitness and Chanson International go up and down completely randomly.

Pair Corralation between Planet Fitness and Chanson International

Given the investment horizon of 90 days Planet Fitness is expected to generate 0.08 times more return on investment than Chanson International. However, Planet Fitness is 13.04 times less risky than Chanson International. It trades about 0.14 of its potential returns per unit of risk. Chanson International Holding is currently generating about -0.21 per unit of risk. If you would invest  10,049  in Planet Fitness on October 26, 2024 and sell it today you would earn a total of  406.50  from holding Planet Fitness or generate 4.05% return on investment over 90 days.

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

Planet Fitness  vs.  Chanson International Holding

Planet Fitness

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 16 (%) 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.

Chanson International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chanson International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Planet Fitness and Chanson International

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

The idea behind Planet Fitness and Chanson International Holding 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.