Correlation Between Planet Fitness and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Planet Fitness and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Fevertree Drinks.
Diversification Opportunities for Planet Fitness and Fevertree Drinks
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Fevertree is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Planet Fitness i.e., Planet Fitness and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Planet Fitness and Fevertree Drinks
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.12 times more return on investment than Fevertree Drinks. However, Planet Fitness is 1.12 times more volatile than Fevertree Drinks Plc. It trades about 0.01 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.46 per unit of risk. If you would invest 10,165 in Planet Fitness Cl on October 13, 2024 and sell it today you would earn a total of 3.00 from holding Planet Fitness Cl or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Planet Fitness Cl vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Planet Fitness Cl |
| Fevertree Drinks Plc |
Planet Fitness and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Fevertree Drinks
The main advantage of trading using opposite Planet Fitness and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Planet Fitness vs. Coeur Mining | Planet Fitness vs. Spirent Communications plc | Planet Fitness vs. Thor Mining PLC | Planet Fitness vs. Batm Advanced Communications |
| Fevertree Drinks vs. Bell Food Group | Fevertree Drinks vs. Beazer Homes USA | Fevertree Drinks vs. Hilton Food Group | Fevertree Drinks vs. United Airlines 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |