Correlation Between Raytheon Technologies and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Raytheon Technologies and Planet Fitness 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 Raytheon Technologies and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytheon Technologies Corp and Planet Fitness Cl, you can compare the effects of market volatilities on Raytheon Technologies and Planet Fitness 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 Raytheon Technologies with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Planet Fitness.
Diversification Opportunities for Raytheon Technologies and Planet Fitness
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Raytheon and Planet is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Planet Fitness Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness Cl and Raytheon Technologies 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 Raytheon Technologies Corp are associated (or correlated) with Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness Cl has no effect on the direction of Raytheon Technologies i.e., Raytheon Technologies and Planet Fitness go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Planet Fitness
Assuming the 90 days trading horizon Raytheon Technologies Corp is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Raytheon Technologies Corp is 2.27 times less risky than Planet Fitness. The stock trades about 0.0 of its potential returns per unit of risk. The Planet Fitness Cl is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 7,868 in Planet Fitness Cl on September 1, 2024 and sell it today you would earn a total of 2,112 from holding Planet Fitness Cl or generate 26.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Planet Fitness Cl
Performance |
| Timeline |
| Raytheon Technologies |
| Planet Fitness Cl |
Raytheon Technologies and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Planet Fitness
The main advantage of trading using opposite Raytheon Technologies and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon Technologies position performs unexpectedly, Planet Fitness 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 Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Raytheon Technologies vs. Uniper SE | Raytheon Technologies vs. Mulberry Group PLC | Raytheon Technologies vs. London Security Plc | Raytheon Technologies vs. Triad Group PLC |
| Planet Fitness vs. Gamma Communications PLC | Planet Fitness vs. American Homes 4 | Planet Fitness vs. Aeorema Communications Plc | Planet Fitness vs. Monster Beverage Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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