Correlation Between Planet Fitness and 694308KJ5

Can any of the company-specific risk be diversified away by investing in both Planet Fitness and 694308KJ5 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 694308KJ5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Planet Fitness and PCG 615 15 JAN 33, you can compare the effects of market volatilities on Planet Fitness and 694308KJ5 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 694308KJ5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and 694308KJ5.

Diversification Opportunities for Planet Fitness and 694308KJ5

-0.35

Correlation Coefficient

Planet Fitness  694308KJ5

Very good diversification

The 3 months correlation between Planet and 694308KJ5 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and PCG 615 15 JAN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCG 615 15 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 694308KJ5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCG 615 15 has no effect on the direction of Planet Fitness i.e., Planet Fitness and 694308KJ5 go up and down completely randomly.

Pair Corralation between Planet Fitness and 694308KJ5

Given the investment horizon of 90 days Planet Fitness is expected to generate 2.79 times more return on investment than 694308KJ5. However, Planet Fitness is 2.79 times more volatile than PCG 615 15 JAN 33. It trades about 0.02 of its potential returns per unit of risk. PCG 615 15 JAN 33 is currently generating about -0.02 per unit of risk. If you would invest  10,106  in Planet Fitness on December 24, 2024 and sell it today you would earn a total of  110.00  from holding Planet Fitness or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Planet Fitness  vs.  PCG 615 15 JAN 33

Planet Fitness

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Planet Fitness is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

PCG 615 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 615 15 JAN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KJ5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Planet Fitness and 694308KJ5

The main advantage of trading using opposite Planet Fitness and 694308KJ5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, 694308KJ5 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 694308KJ5 will offset losses from the drop in 694308KJ5's long position.

The idea behind Planet Fitness and PCG 615 15 JAN 33 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.