Correlation Between Planet Fitness and Home Depot
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Home Depot 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 Home Depot 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 Home Depot, you can compare the effects of market volatilities on Planet Fitness and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Home Depot.
Diversification Opportunities for Planet Fitness and Home Depot
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Planet and Home is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Planet Fitness i.e., Planet Fitness and Home Depot go up and down completely randomly.
Pair Corralation between Planet Fitness and Home Depot
If you would invest 9,970 in Planet Fitness Cl on October 24, 2024 and sell it today you would earn a total of 655.00 from holding Planet Fitness Cl or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 84.21% |
| Values | Daily Returns |
Planet Fitness Cl vs. Home Depot
Performance |
| Timeline |
| Planet Fitness Cl |
| Home Depot |
Planet Fitness and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Home Depot
The main advantage of trading using opposite Planet Fitness and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Planet Fitness vs. Home Depot | Planet Fitness vs. Weiss Korea Opportunity | Planet Fitness vs. River and Mercantile | Planet Fitness vs. Chrysalis Investments |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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