Correlation Between Planet Fitness and Hyundai
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Hyundai 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 Hyundai 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 Hyundai Motor, you can compare the effects of market volatilities on Planet Fitness and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Hyundai.
Diversification Opportunities for Planet Fitness and Hyundai
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and Hyundai is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Planet Fitness i.e., Planet Fitness and Hyundai go up and down completely randomly.
Pair Corralation between Planet Fitness and Hyundai
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.29 times more return on investment than Hyundai. However, Planet Fitness is 1.29 times more volatile than Hyundai Motor. It trades about 0.35 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.11 per unit of risk. If you would invest 7,830 in Planet Fitness Cl on August 25, 2024 and sell it today you would earn a total of 2,244 from holding Planet Fitness Cl or generate 28.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness Cl vs. Hyundai Motor
Performance |
| Timeline |
| Planet Fitness Cl |
| Hyundai Motor |
Planet Fitness and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Hyundai
The main advantage of trading using opposite Planet Fitness and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Planet Fitness vs. Samsung Electronics Co | Planet Fitness vs. Samsung Electronics Co | Planet Fitness vs. Hyundai Motor | Planet Fitness vs. Toyota Motor Corp |
| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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