Correlation Between Escalade Incorporated and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated 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 Escalade Incorporated and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Planet Fitness, you can compare the effects of market volatilities on Escalade Incorporated 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 Escalade Incorporated with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Planet Fitness.
Diversification Opportunities for Escalade Incorporated and Planet Fitness
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Escalade and Planet is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Escalade Incorporated 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 Escalade Incorporated 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 Escalade Incorporated i.e., Escalade Incorporated and Planet Fitness go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Planet Fitness
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 2.33 times less return on investment than Planet Fitness. In addition to that, Escalade Incorporated is 1.08 times more volatile than Planet Fitness. It trades about 0.15 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.39 per unit of volatility. If you would invest 8,125 in Planet Fitness on August 27, 2024 and sell it today you would earn a total of 2,028 from holding Planet Fitness or generate 24.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Planet Fitness
Performance |
| Timeline |
| Escalade Incorporated |
| Planet Fitness |
Escalade Incorporated and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Planet Fitness
The main advantage of trading using opposite Escalade Incorporated and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated 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.| Escalade Incorporated vs. Johnson Outdoors | Escalade Incorporated vs. First Business Financial | Escalade Incorporated vs. Flexsteel Industries | Escalade Incorporated vs. Superior Uniform Group |
| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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