Correlation Between Planet Fitness and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on Planet Fitness and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and PPHE Hotel.
Diversification Opportunities for Planet Fitness and PPHE Hotel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Planet and PPHE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Planet Fitness i.e., Planet Fitness and PPHE Hotel go up and down completely randomly.
Pair Corralation between Planet Fitness and PPHE Hotel
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.19 times more return on investment than PPHE Hotel. However, Planet Fitness is 1.19 times more volatile than PPHE Hotel Group. It trades about 0.14 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.22 per unit of risk. If you would invest 10,087 in Planet Fitness Cl on October 25, 2024 and sell it today you would earn a total of 505.00 from holding Planet Fitness Cl or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Planet Fitness Cl vs. PPHE Hotel Group
Performance |
| Timeline |
| Planet Fitness Cl |
| PPHE Hotel Group |
Planet Fitness and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and PPHE Hotel
The main advantage of trading using opposite Planet Fitness and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's 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 |
| PPHE Hotel vs. GreenX Metals | PPHE Hotel vs. Air Products Chemicals | PPHE Hotel vs. Lundin Mining Corp | PPHE Hotel vs. Pfeiffer Vacuum Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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