Correlation Between Planet Fitness and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Martin Marietta 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 Martin Marietta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness Cl and Martin Marietta Materials, you can compare the effects of market volatilities on Planet Fitness and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Martin Marietta.
Diversification Opportunities for Planet Fitness and Martin Marietta
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Planet and Martin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Cl are associated (or correlated) with Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Planet Fitness i.e., Planet Fitness and Martin Marietta go up and down completely randomly.
Pair Corralation between Planet Fitness and Martin Marietta
Assuming the 90 days trading horizon Planet Fitness is expected to generate 1.22 times less return on investment than Martin Marietta. In addition to that, Planet Fitness is 1.51 times more volatile than Martin Marietta Materials. It trades about 0.03 of its total potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.06 per unit of volatility. If you would invest 34,143 in Martin Marietta Materials on October 11, 2024 and sell it today you would earn a total of 16,872 from holding Martin Marietta Materials or generate 49.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.2% |
| Values | Daily Returns |
Planet Fitness Cl vs. Martin Marietta Materials
Performance |
| Timeline |
| Planet Fitness Cl |
| Martin Marietta Materials |
Planet Fitness and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Martin Marietta
The main advantage of trading using opposite Planet Fitness and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Planet Fitness vs. Walmart | Planet Fitness vs. BYD Co | Planet Fitness vs. Volkswagen AG | Planet Fitness vs. Volkswagen AG Non Vtg |
| Martin Marietta vs. Planet Fitness Cl | Martin Marietta vs. Ashtead Technology Holdings | Martin Marietta vs. Made Tech Group | Martin Marietta vs. Smarttech247 Group PLC |
Check out your portfolio center.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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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