Correlation Between Planet Fitness and Nautilus

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

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

Diversification Opportunities for Planet Fitness and Nautilus

-0.75

Correlation Coefficient

Planet Fitness  Nautilus

Pay attention - limited upside

The 3 months correlation between Planet and Nautilus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Nautilus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nautilus Group 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 Nautilus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nautilus Group has no effect on the direction of Planet Fitness i.e., Planet Fitness and Nautilus go up and down completely randomly.

Pair Corralation between Planet Fitness and Nautilus

If you would invest  8,239  in Planet Fitness on September 13, 2024 and sell it today you would earn a total of  1,962  from holding Planet Fitness or generate 23.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Planet Fitness  vs.  Nautilus Group

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 conflicting basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nautilus Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nautilus Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Nautilus is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Planet Fitness and Nautilus

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

The idea behind Planet Fitness and Nautilus Group 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 Stocks Directory module to find actively traded stocks across global markets.