Correlation Between Planet Fitness and RBG Holdings
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and RBG Holdings 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 RBG Holdings 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 RBG Holdings PLC, you can compare the effects of market volatilities on Planet Fitness and RBG Holdings 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 RBG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and RBG Holdings.
Diversification Opportunities for Planet Fitness and RBG Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and RBG is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and RBG Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBG Holdings 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 RBG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBG Holdings PLC has no effect on the direction of Planet Fitness i.e., Planet Fitness and RBG Holdings go up and down completely randomly.
Pair Corralation between Planet Fitness and RBG Holdings
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 0.39 times more return on investment than RBG Holdings. However, Planet Fitness Cl is 2.55 times less risky than RBG Holdings. It trades about 0.08 of its potential returns per unit of risk. RBG Holdings PLC is currently generating about -0.06 per unit of risk. If you would invest 6,959 in Planet Fitness Cl on September 12, 2024 and sell it today you would earn a total of 3,251 from holding Planet Fitness Cl or generate 46.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
Planet Fitness Cl vs. RBG Holdings PLC
Performance |
| Timeline |
| Planet Fitness Cl |
| RBG Holdings PLC |
Planet Fitness and RBG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and RBG Holdings
The main advantage of trading using opposite Planet Fitness and RBG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, RBG Holdings 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 RBG Holdings will offset losses from the drop in RBG Holdings' long position.| Planet Fitness vs. Ebro Foods | Planet Fitness vs. Naked Wines plc | Planet Fitness vs. One Media iP | Planet Fitness vs. Zinc Media Group |
| RBG Holdings vs. Polar Capital Technology | RBG Holdings vs. Electronic Arts | RBG Holdings vs. Roper Technologies | RBG Holdings vs. Albion Technology General |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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