Correlation Between Hisense Home and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Hisense Home 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 Hisense Home and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and Planet Fitness, you can compare the effects of market volatilities on Hisense Home 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 Hisense Home with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Planet Fitness.
Diversification Opportunities for Hisense Home and Planet Fitness
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hisense and Planet is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Hisense Home 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 Hisense Home Appliances 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 Hisense Home i.e., Hisense Home and Planet Fitness go up and down completely randomly.
Pair Corralation between Hisense Home and Planet Fitness
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.86 times more return on investment than Planet Fitness. However, Hisense Home is 1.86 times more volatile than Planet Fitness. It trades about 0.07 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.08 per unit of risk. If you would invest 150.00 in Hisense Home Appliances on October 16, 2024 and sell it today you would earn a total of 176.00 from holding Hisense Home Appliances or generate 117.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Planet Fitness
Performance |
| Timeline |
| Hisense Home Appliances |
| Planet Fitness |
Hisense Home and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Planet Fitness
The main advantage of trading using opposite Hisense Home and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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.| Hisense Home vs. Performance Food Group | Hisense Home vs. CEOTRONICS | Hisense Home vs. United Natural Foods | Hisense Home vs. SENECA FOODS A |
| Planet Fitness vs. INVITATION HOMES DL | Planet Fitness vs. Hisense Home Appliances | Planet Fitness vs. THAI BEVERAGE | Planet Fitness vs. Penn National Gaming |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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