Correlation Between Planet Fitness and Compal Electronics
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Compal Electronics 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 Compal Electronics 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 Compal Electronics GDR, you can compare the effects of market volatilities on Planet Fitness and Compal Electronics 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 Compal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Compal Electronics.
Diversification Opportunities for Planet Fitness and Compal Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Compal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Compal Electronics GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics GDR 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 Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics GDR has no effect on the direction of Planet Fitness i.e., Planet Fitness and Compal Electronics go up and down completely randomly.
Pair Corralation between Planet Fitness and Compal Electronics
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.24 times more return on investment than Compal Electronics. However, Planet Fitness is 1.24 times more volatile than Compal Electronics GDR. It trades about 0.04 of its potential returns per unit of risk. Compal Electronics GDR is currently generating about 0.01 per unit of risk. If you would invest 7,874 in Planet Fitness Cl on September 13, 2024 and sell it today you would earn a total of 2,336 from holding Planet Fitness Cl or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 81.21% |
| Values | Daily Returns |
Planet Fitness Cl vs. Compal Electronics GDR
Performance |
| Timeline |
| Planet Fitness Cl |
| Compal Electronics GDR |
Planet Fitness and Compal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Compal Electronics
The main advantage of trading using opposite Planet Fitness and Compal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Compal Electronics 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 Compal Electronics will offset losses from the drop in Compal Electronics' long position.| Planet Fitness vs. Bisichi Mining PLC | Planet Fitness vs. Endeavour Mining Corp | Planet Fitness vs. Liberty Media Corp | Planet Fitness vs. AcadeMedia AB |
| Compal Electronics vs. Planet Fitness Cl | Compal Electronics vs. Inspiration Healthcare Group | Compal Electronics vs. Cairo Communication SpA | Compal Electronics vs. Worldwide Healthcare Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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