Correlation Between Thor Industries and Planet Fitness

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

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

Diversification Opportunities for Thor Industries and Planet Fitness

-0.37

Correlation Coefficient

Thor Industries  Planet Fitness

Very good diversification

The 3 months correlation between Thor and Planet is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Thor Industries 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 Thor Industries are associated (or correlated) with Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Thor Industries i.e., Thor Industries and Planet Fitness go up and down completely randomly.

Pair Corralation between Thor Industries and Planet Fitness

Considering the 90-day investment horizon Thor Industries is expected to generate 1.15 times more return on investment than Planet Fitness. However, Thor Industries is 1.15 times more volatile than Planet Fitness. It trades about 0.24 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.27 per unit of risk. If you would invest  9,593  in Thor Industries on October 23, 2024 and sell it today you would earn a total of  769.00  from holding Thor Industries or generate 8.02% return on investment over 90 days.

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

Thor Industries  vs.  Planet Fitness

Thor Industries

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Thor Industries is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Planet Fitness

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 19 (%) 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.

Pair Trading with Thor Industries and Planet Fitness

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

The idea behind Thor Industries and Planet Fitness 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.