Correlation Between INVITATION HOMES and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES 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 INVITATION HOMES and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and Planet Fitness, you can compare the effects of market volatilities on INVITATION HOMES 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 INVITATION HOMES with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and Planet Fitness.
Diversification Opportunities for INVITATION HOMES and Planet Fitness
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between INVITATION and Planet is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and INVITATION HOMES 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 INVITATION HOMES DL 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 INVITATION HOMES i.e., INVITATION HOMES and Planet Fitness go up and down completely randomly.
Pair Corralation between INVITATION HOMES and Planet Fitness
Assuming the 90 days horizon INVITATION HOMES DL is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, INVITATION HOMES DL is 1.35 times less risky than Planet Fitness. The stock trades about -0.17 of its potential returns per unit of risk. The Planet Fitness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,350 in Planet Fitness on October 30, 2024 and sell it today you would earn a total of 450.00 from holding Planet Fitness or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. Planet Fitness
Performance |
| Timeline |
| INVITATION HOMES |
| Planet Fitness |
INVITATION HOMES and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and Planet Fitness
The main advantage of trading using opposite INVITATION HOMES and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES 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.| INVITATION HOMES vs. ANTA SPORTS PRODUCT | INVITATION HOMES vs. KENEDIX OFFICE INV | INVITATION HOMES vs. UNIVMUSIC GRPADR050 | INVITATION HOMES vs. MOVIE GAMES SA |
| Planet Fitness vs. Booking Holdings | Planet Fitness vs. Oriental Land Co | Planet Fitness vs. ANTA Sports Products | Planet Fitness vs. Li Ning Company |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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