Correlation Between Planet Fitness and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Molson Coors 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 Molson Coors 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 Molson Coors Beverage, you can compare the effects of market volatilities on Planet Fitness and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Molson Coors.
Diversification Opportunities for Planet Fitness and Molson Coors
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Molson is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of Planet Fitness i.e., Planet Fitness and Molson Coors go up and down completely randomly.
Pair Corralation between Planet Fitness and Molson Coors
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.46 times more return on investment than Molson Coors. However, Planet Fitness is 1.46 times more volatile than Molson Coors Beverage. It trades about 0.03 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.03 per unit of risk. If you would invest 8,043 in Planet Fitness Cl on October 11, 2024 and sell it today you would earn a total of 1,902 from holding Planet Fitness Cl or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.25% |
| Values | Daily Returns |
Planet Fitness Cl vs. Molson Coors Beverage
Performance |
| Timeline |
| Planet Fitness Cl |
| Molson Coors Beverage |
Planet Fitness and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Molson Coors
The main advantage of trading using opposite Planet Fitness and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Planet Fitness vs. Walmart | Planet Fitness vs. BYD Co | Planet Fitness vs. Volkswagen AG | Planet Fitness vs. Volkswagen AG Non Vtg |
| Molson Coors vs. Primary Health Properties | Molson Coors vs. Abingdon Health Plc | Molson Coors vs. Planet Fitness Cl | Molson Coors vs. Cizzle Biotechnology Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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