Correlation Between Acadia Healthcare and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare 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 Acadia Healthcare and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Planet Fitness, you can compare the effects of market volatilities on Acadia Healthcare 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 Acadia Healthcare with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Planet Fitness.
Diversification Opportunities for Acadia Healthcare and Planet Fitness
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acadia and Planet is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare i.e., Acadia Healthcare and Planet Fitness go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Planet Fitness
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.66 times more return on investment than Planet Fitness. However, Acadia Healthcare is 1.66 times more volatile than Planet Fitness. It trades about 0.36 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.01 per unit of risk. 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 |
Acadia Healthcare vs. Planet Fitness
Performance |
| Timeline |
| Acadia Healthcare |
| Planet Fitness |
Acadia Healthcare and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Planet Fitness
The main advantage of trading using opposite Acadia Healthcare and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare 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.| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
| Planet Fitness vs. Compagnie Plastic Omnium | Planet Fitness vs. SANOK RUBBER ZY | Planet Fitness vs. VULCAN MATERIALS | Planet Fitness vs. Lifeway Foods |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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