Correlation Between Copa Holdings and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Copa Holdings 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 Copa Holdings and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copa Holdings SA and Planet Fitness, you can compare the effects of market volatilities on Copa Holdings 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 Copa Holdings with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copa Holdings and Planet Fitness.
Diversification Opportunities for Copa Holdings and Planet Fitness
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copa and Planet is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Copa Holdings SA and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Copa Holdings 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 Copa Holdings SA 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 Copa Holdings i.e., Copa Holdings and Planet Fitness go up and down completely randomly.
Pair Corralation between Copa Holdings and Planet Fitness
Considering the 90-day investment horizon Copa Holdings is expected to generate 1.32 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, Copa Holdings SA is 1.13 times less risky than Planet Fitness. It trades about 0.03 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,800 in Planet Fitness on September 4, 2024 and sell it today you would earn a total of 2,158 from holding Planet Fitness or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copa Holdings SA vs. Planet Fitness
Performance |
| Timeline |
| Copa Holdings SA |
| Planet Fitness |
Copa Holdings and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copa Holdings and Planet Fitness
The main advantage of trading using opposite Copa Holdings and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copa Holdings 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.| Copa Holdings vs. Delta Air Lines | Copa Holdings vs. United Airlines Holdings | Copa Holdings vs. Frontier Group Holdings |
| Planet Fitness vs. Hyatt Hotels | Planet Fitness vs. Smart Share Global | Planet Fitness vs. Sweetgreen | Planet Fitness vs. Wyndham Hotels Resorts |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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