Correlation Between Planet Fitness and Amaroq Minerals
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Amaroq Minerals 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 Amaroq Minerals 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 Amaroq Minerals, you can compare the effects of market volatilities on Planet Fitness and Amaroq Minerals 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 Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Amaroq Minerals.
Diversification Opportunities for Planet Fitness and Amaroq Minerals
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Amaroq is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals 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 Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Planet Fitness i.e., Planet Fitness and Amaroq Minerals go up and down completely randomly.
Pair Corralation between Planet Fitness and Amaroq Minerals
Assuming the 90 days trading horizon Planet Fitness is expected to generate 1.32 times less return on investment than Amaroq Minerals. But when comparing it to its historical volatility, Planet Fitness Cl is 1.0 times less risky than Amaroq Minerals. It trades about 0.14 of its potential returns per unit of risk. Amaroq Minerals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,100 in Amaroq Minerals on October 25, 2024 and sell it today you would earn a total of 4,115 from holding Amaroq Minerals or generate 67.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.8% |
| Values | Daily Returns |
Planet Fitness Cl vs. Amaroq Minerals
Performance |
| Timeline |
| Planet Fitness Cl |
| Amaroq Minerals |
Planet Fitness and Amaroq Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Amaroq Minerals
The main advantage of trading using opposite Planet Fitness and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.| Planet Fitness vs. Vienna Insurance Group | Planet Fitness vs. Dairy Farm International | Planet Fitness vs. Bell Food Group | Planet Fitness vs. Trainline Plc |
| Amaroq Minerals vs. Westlake Chemical Corp | Amaroq Minerals vs. JD Sports Fashion | Amaroq Minerals vs. Sealed Air Corp | Amaroq Minerals vs. Symphony Environmental Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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