Correlation Between Planet Fitness and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Omega Healthcare 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 Omega Healthcare 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 Omega Healthcare Investors, you can compare the effects of market volatilities on Planet Fitness and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Omega Healthcare.
Diversification Opportunities for Planet Fitness and Omega Healthcare
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Omega is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Planet Fitness i.e., Planet Fitness and Omega Healthcare go up and down completely randomly.
Pair Corralation between Planet Fitness and Omega Healthcare
Assuming the 90 days trading horizon Planet Fitness Cl is expected to under-perform the Omega Healthcare. In addition to that, Planet Fitness is 1.36 times more volatile than Omega Healthcare Investors. It trades about -0.25 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about -0.05 per unit of volatility. If you would invest 3,758 in Omega Healthcare Investors on November 28, 2024 and sell it today you would lose (85.00) from holding Omega Healthcare Investors or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Planet Fitness Cl vs. Omega Healthcare Investors
Performance |
| Timeline |
| Planet Fitness Cl |
| Omega Healthcare Inv |
Planet Fitness and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Omega Healthcare
The main advantage of trading using opposite Planet Fitness and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Planet Fitness vs. Flutter Entertainment PLC | Planet Fitness vs. Wheaton Precious Metals | Planet Fitness vs. AMG Advanced Metallurgical | Planet Fitness vs. Darden Restaurants |
| Omega Healthcare vs. Commerzbank AG | Omega Healthcare vs. Fevertree Drinks Plc | Omega Healthcare vs. Sydbank | Omega Healthcare vs. Liechtensteinische Landesbank AG |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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