Correlation Between DFS Furniture and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Planet Fitness Cl, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Planet Fitness.
Diversification Opportunities for DFS Furniture and Planet Fitness
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DFS and Planet is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Planet Fitness Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness Cl and DFS Furniture 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 DFS Furniture PLC 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 Cl has no effect on the direction of DFS Furniture i.e., DFS Furniture and Planet Fitness go up and down completely randomly.
Pair Corralation between DFS Furniture and Planet Fitness
Assuming the 90 days trading horizon DFS Furniture is expected to generate 5.16 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, DFS Furniture PLC is 1.16 times less risky than Planet Fitness. It trades about 0.01 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,677 in Planet Fitness Cl on September 3, 2024 and sell it today you would earn a total of 2,285 from holding Planet Fitness Cl or generate 29.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.32% |
| Values | Daily Returns |
DFS Furniture PLC vs. Planet Fitness Cl
Performance |
| Timeline |
| DFS Furniture PLC |
| Planet Fitness Cl |
DFS Furniture and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Planet Fitness
The main advantage of trading using opposite DFS Furniture and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Rockfire Resources plc | DFS Furniture vs. Tlou Energy | DFS Furniture vs. Falcon Oil Gas | DFS Furniture vs. Helium One Global |
| Planet Fitness vs. PPHE Hotel Group | Planet Fitness vs. Arrow Electronics | Planet Fitness vs. Vienna Insurance Group | Planet Fitness vs. Dalata Hotel Group |
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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