Correlation Between Bt Brands and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Bt Brands 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 Bt Brands and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Planet Fitness, you can compare the effects of market volatilities on Bt Brands 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 Bt Brands with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Planet Fitness.
Diversification Opportunities for Bt Brands and Planet Fitness
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTBD and Planet is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Bt Brands 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 Bt Brands 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 Bt Brands i.e., Bt Brands and Planet Fitness go up and down completely randomly.
Pair Corralation between Bt Brands and Planet Fitness
Given the investment horizon of 90 days Bt Brands is expected to generate 3.09 times more return on investment than Planet Fitness. However, Bt Brands is 3.09 times more volatile than Planet Fitness. It trades about -0.02 of its potential returns per unit of risk. Planet Fitness is currently generating about -0.12 per unit of risk. If you would invest 178.00 in Bt Brands on November 27, 2024 and sell it today you would lose (8.00) from holding Bt Brands or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Planet Fitness
Performance |
| Timeline |
| Bt Brands |
| Planet Fitness |
Bt Brands and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Planet Fitness
The main advantage of trading using opposite Bt Brands and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands 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.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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