Correlation Between ECHO INVESTMENT and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT 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 ECHO INVESTMENT and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECHO INVESTMENT ZY and Planet Fitness, you can compare the effects of market volatilities on ECHO INVESTMENT 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 ECHO INVESTMENT with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and Planet Fitness.
Diversification Opportunities for ECHO INVESTMENT and Planet Fitness
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECHO and Planet is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and ECHO INVESTMENT 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 ECHO INVESTMENT ZY 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 has no effect on the direction of ECHO INVESTMENT i.e., ECHO INVESTMENT and Planet Fitness go up and down completely randomly.
Pair Corralation between ECHO INVESTMENT and Planet Fitness
Assuming the 90 days horizon ECHO INVESTMENT ZY is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, ECHO INVESTMENT ZY is 1.06 times less risky than Planet Fitness. The stock trades about -0.1 of its potential returns per unit of risk. The Planet Fitness is currently generating about 0.21 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECHO INVESTMENT ZY vs. Planet Fitness
Performance |
| Timeline |
| ECHO INVESTMENT ZY |
| Planet Fitness |
ECHO INVESTMENT and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECHO INVESTMENT and Planet Fitness
The main advantage of trading using opposite ECHO INVESTMENT and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT 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.| ECHO INVESTMENT vs. CLOVER HEALTH INV | ECHO INVESTMENT vs. Planet Fitness | ECHO INVESTMENT vs. Ares Management Corp | ECHO INVESTMENT vs. PENN Entertainment |
| Planet Fitness vs. Infrastrutture Wireless Italiane | Planet Fitness vs. Japan Medical Dynamic | Planet Fitness vs. CHEMICAL INDUSTRIES | Planet Fitness vs. PULSION Medical Systems |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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