Correlation Between Planet Fitness and Standard Chartered
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Standard Chartered 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 Standard Chartered 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 Standard Chartered PLC, you can compare the effects of market volatilities on Planet Fitness and Standard Chartered 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 Standard Chartered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Standard Chartered.
Diversification Opportunities for Planet Fitness and Standard Chartered
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Standard is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Standard Chartered PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Chartered 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 Standard Chartered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Chartered PLC has no effect on the direction of Planet Fitness i.e., Planet Fitness and Standard Chartered go up and down completely randomly.
Pair Corralation between Planet Fitness and Standard Chartered
Assuming the 90 days trading horizon Planet Fitness is expected to generate 1.28 times less return on investment than Standard Chartered. In addition to that, Planet Fitness is 1.34 times more volatile than Standard Chartered PLC. It trades about 0.04 of its total potential returns per unit of risk. Standard Chartered PLC is currently generating about 0.07 per unit of volatility. If you would invest 58,619 in Standard Chartered PLC on September 14, 2024 and sell it today you would earn a total of 40,541 from holding Standard Chartered PLC or generate 69.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.92% |
| Values | Daily Returns |
Planet Fitness Cl vs. Standard Chartered PLC
Performance |
| Timeline |
| Planet Fitness Cl |
| Standard Chartered PLC |
Planet Fitness and Standard Chartered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Standard Chartered
The main advantage of trading using opposite Planet Fitness and Standard Chartered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Standard Chartered 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 Standard Chartered will offset losses from the drop in Standard Chartered's long position.| Planet Fitness vs. JD Sports Fashion | Planet Fitness vs. Bloomsbury Publishing Plc | Planet Fitness vs. Arrow Electronics | Planet Fitness vs. Telecom Italia SpA |
| Standard Chartered vs. PureTech Health plc | Standard Chartered vs. Taiwan Semiconductor Manufacturing | Standard Chartered vs. Planet Fitness Cl | Standard Chartered vs. Ross Stores |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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