Correlation Between Planet Fitness and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Astral Foods 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 Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Astral Foods Limited, you can compare the effects of market volatilities on Planet Fitness and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Astral Foods.
Diversification Opportunities for Planet Fitness and Astral Foods
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Astral is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Planet Fitness i.e., Planet Fitness and Astral Foods go up and down completely randomly.
Pair Corralation between Planet Fitness and Astral Foods
Assuming the 90 days horizon Planet Fitness is expected to generate 0.76 times more return on investment than Astral Foods. However, Planet Fitness is 1.31 times less risky than Astral Foods. It trades about 0.04 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.02 per unit of risk. If you would invest 7,426 in Planet Fitness on October 14, 2024 and sell it today you would earn a total of 2,424 from holding Planet Fitness or generate 32.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Astral Foods Limited
Performance |
| Timeline |
| Planet Fitness |
| Astral Foods Limited |
Planet Fitness and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Astral Foods
The main advantage of trading using opposite Planet Fitness and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Planet Fitness vs. Oriental Land Co | Planet Fitness vs. Superior Plus Corp | Planet Fitness vs. NMI Holdings | Planet Fitness vs. SIVERS SEMICONDUCTORS AB |
| Astral Foods vs. NIGHTINGALE HEALTH EO | Astral Foods vs. GRUPO CARSO A1 | Astral Foods vs. Planet Fitness | Astral Foods vs. Geely Automobile Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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