Correlation Between Planet Fitness and IShares MSCI

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

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

Diversification Opportunities for Planet Fitness and IShares MSCI

0.38

Correlation Coefficient

Planet Fitness  IShares MSCI

Weak diversification

The 3 months correlation between Planet and IShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and iShares MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI has no effect on the direction of Planet Fitness i.e., Planet Fitness and IShares MSCI go up and down completely randomly.

Pair Corralation between Planet Fitness and IShares MSCI

Given the investment horizon of 90 days Planet Fitness is expected to generate 117.52 times less return on investment than IShares MSCI. In addition to that, Planet Fitness is 1.38 times more volatile than iShares MSCI. It trades about 0.0 of its total potential returns per unit of risk. iShares MSCI is currently generating about 0.22 per unit of volatility. If you would invest  37.00  in iShares MSCI on October 10, 2024 and sell it today you would earn a total of  2.00  from holding iShares MSCI or generate 5.41% return on investment over 90 days.

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

Planet Fitness  vs.  iShares MSCI

Planet Fitness

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 12 (%) 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.

iShares MSCI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Planet Fitness and IShares MSCI

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

The idea behind Planet Fitness and iShares MSCI 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.