Correlation Between Planet Fitness and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Acadia Healthcare 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 Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Acadia Healthcare, you can compare the effects of market volatilities on Planet Fitness and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Acadia Healthcare.
Diversification Opportunities for Planet Fitness and Acadia Healthcare
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Acadia is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of Planet Fitness i.e., Planet Fitness and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Planet Fitness and Acadia Healthcare
Assuming the 90 days horizon Planet Fitness is expected to generate 75.24 times less return on investment than Acadia Healthcare. But when comparing it to its historical volatility, Planet Fitness is 1.66 times less risky than Acadia Healthcare. It trades about 0.01 of its potential returns per unit of risk. Acadia Healthcare is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 3,740 in Acadia Healthcare on October 11, 2024 and sell it today you would earn a total of 700.00 from holding Acadia Healthcare or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Planet Fitness vs. Acadia Healthcare
Performance |
| Timeline |
| Planet Fitness |
| Acadia Healthcare |
Planet Fitness and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Acadia Healthcare
The main advantage of trading using opposite Planet Fitness and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| Planet Fitness vs. Compagnie Plastic Omnium | Planet Fitness vs. SANOK RUBBER ZY | Planet Fitness vs. VULCAN MATERIALS | Planet Fitness vs. Lifeway Foods |
| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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