Correlation Between Planet Fitness and Playtika Holding

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

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

Diversification Opportunities for Planet Fitness and Playtika Holding

0.25

Correlation Coefficient

Planet Fitness  Playtika Holding

Modest diversification

The 3 months correlation between Planet and Playtika is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Planet Fitness i.e., Planet Fitness and Playtika Holding go up and down completely randomly.

Pair Corralation between Planet Fitness and Playtika Holding

Given the investment horizon of 90 days Planet Fitness is expected to generate 0.69 times more return on investment than Playtika Holding. However, Planet Fitness is 1.45 times less risky than Playtika Holding. It trades about -0.07 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.19 per unit of risk. If you would invest  9,959  in Planet Fitness on December 2, 2024 and sell it today you would lose (704.00) from holding Planet Fitness or give up 7.07% of portfolio value over 90 days.

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

Planet Fitness  vs.  Playtika Holding Corp

Planet Fitness

Risk-Adjusted Performance

Very Weak

Over the last 90 days Planet Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Playtika Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Planet Fitness and Playtika Holding

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

The idea behind Planet Fitness and Playtika Holding Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.