Correlation Between Planet Fitness and Bank of America
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Bank of America 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 Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Verizon Communications, you can compare the effects of market volatilities on Planet Fitness and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Bank of America.
Diversification Opportunities for Planet Fitness and Bank of America
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Planet and Bank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Planet Fitness i.e., Planet Fitness and Bank of America go up and down completely randomly.
Pair Corralation between Planet Fitness and Bank of America
Assuming the 90 days horizon Planet Fitness is expected to generate 1.51 times more return on investment than Bank of America. However, Planet Fitness is 1.51 times more volatile than Verizon Communications. It trades about 0.21 of its potential returns per unit of risk. Verizon Communications is currently generating about -0.02 per unit of risk. If you would invest 9,650 in Planet Fitness on November 3, 2024 and sell it today you would earn a total of 750.00 from holding Planet Fitness or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Verizon Communications
Performance |
| Timeline |
| Planet Fitness |
| Verizon Communications |
Planet Fitness and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Bank of America
The main advantage of trading using opposite Planet Fitness and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Planet Fitness vs. Infrastrutture Wireless Italiane | Planet Fitness vs. Japan Medical Dynamic | Planet Fitness vs. CHEMICAL INDUSTRIES | Planet Fitness vs. PULSION Medical Systems |
| Bank of America vs. MUTUIONLINE | Bank of America vs. MOVIE GAMES SA | Bank of America vs. Media and Games | Bank of America vs. DETALION GAMES SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets |