Correlation Between Planet Fitness and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Universal Insurance 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 Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Universal Insurance Holdings, you can compare the effects of market volatilities on Planet Fitness and Universal Insurance 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 Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Universal Insurance.
Diversification Opportunities for Planet Fitness and Universal Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Planet and Universal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance 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 are associated (or correlated) with Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of Planet Fitness i.e., Planet Fitness and Universal Insurance go up and down completely randomly.
Pair Corralation between Planet Fitness and Universal Insurance
Assuming the 90 days horizon Planet Fitness is expected to generate 1.08 times more return on investment than Universal Insurance. However, Planet Fitness is 1.08 times more volatile than Universal Insurance Holdings. It trades about 0.18 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about -0.09 per unit of risk. If you would invest 9,750 in Planet Fitness on November 7, 2024 and sell it today you would earn a total of 650.00 from holding Planet Fitness or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Universal Insurance Holdings
Performance |
| Timeline |
| Planet Fitness |
| Universal Insurance |
Planet Fitness and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Universal Insurance
The main advantage of trading using opposite Planet Fitness and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Universal Insurance 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| Planet Fitness vs. AGNC INVESTMENT | Planet Fitness vs. CHRYSALIS INVESTMENTS LTD | Planet Fitness vs. JAPAN TOBACCO UNSPADR12 | Planet Fitness vs. DIVERSIFIED ROYALTY |
| Universal Insurance vs. MeVis Medical Solutions | Universal Insurance vs. Agilent Technologies | Universal Insurance vs. Advanced Medical Solutions | Universal Insurance vs. IMAGIN MEDICAL INC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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