Correlation Between Dominos Pizza and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza 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 Dominos Pizza and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza Common and Planet Fitness, you can compare the effects of market volatilities on Dominos Pizza 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 Dominos Pizza with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Planet Fitness.
Diversification Opportunities for Dominos Pizza and Planet Fitness
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dominos and Planet is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Common and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Dominos Pizza 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 Dominos Pizza Common 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 Dominos Pizza i.e., Dominos Pizza and Planet Fitness go up and down completely randomly.
Pair Corralation between Dominos Pizza and Planet Fitness
Considering the 90-day investment horizon Dominos Pizza Common is expected to generate 1.14 times more return on investment than Planet Fitness. However, Dominos Pizza is 1.14 times more volatile than Planet Fitness. It trades about 0.16 of its potential returns per unit of risk. Planet Fitness is currently generating about -0.12 per unit of risk. If you would invest 43,115 in Dominos Pizza Common on November 27, 2024 and sell it today you would earn a total of 2,449 from holding Dominos Pizza Common or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dominos Pizza Common vs. Planet Fitness
Performance |
| Timeline |
| Dominos Pizza Common |
| Planet Fitness |
Dominos Pizza and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Planet Fitness
The main advantage of trading using opposite Dominos Pizza and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza 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.| Dominos Pizza vs. Brinker International | Dominos Pizza vs. Jack In The | Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. Wingstop |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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