Correlation Between Hyatt Hotels and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels 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 Hyatt Hotels and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Planet Fitness, you can compare the effects of market volatilities on Hyatt Hotels 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 Hyatt Hotels with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Planet Fitness.
Diversification Opportunities for Hyatt Hotels and Planet Fitness
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyatt and Planet is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Hyatt Hotels 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 Hyatt Hotels 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 Hyatt Hotels i.e., Hyatt Hotels and Planet Fitness go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Planet Fitness
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 1.67 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, Hyatt Hotels is 1.09 times less risky than Planet Fitness. It trades about 0.06 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,804 in Planet Fitness on September 4, 2024 and sell it today you would earn a total of 3,135 from holding Planet Fitness or generate 46.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. Planet Fitness
Performance |
| Timeline |
| Hyatt Hotels |
| Planet Fitness |
Hyatt Hotels and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Planet Fitness
The main advantage of trading using opposite Hyatt Hotels and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels 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.| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. InterContinental Hotels Group | Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels vs. Wyndham Hotels Resorts |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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