Correlation Between JD Sports and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Planet Fitness Cl, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Planet Fitness.
Diversification Opportunities for JD Sports and Planet Fitness
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JD Sports and Planet is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion 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 JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Planet Fitness go up and down completely randomly.
Pair Corralation between JD Sports and Planet Fitness
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Planet Fitness. In addition to that, JD Sports is 3.67 times more volatile than Planet Fitness Cl. It trades about -0.12 of its total potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.26 per unit of volatility. If you would invest 9,599 in Planet Fitness Cl on September 14, 2024 and sell it today you would earn a total of 611.00 from holding Planet Fitness Cl or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JD Sports Fashion vs. Planet Fitness Cl
Performance |
| Timeline |
| JD Sports Fashion |
| Planet Fitness Cl |
JD Sports and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Planet Fitness
The main advantage of trading using opposite JD Sports and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.| JD Sports vs. Hochschild Mining plc | JD Sports vs. Supermarket Income REIT | JD Sports vs. Associated British Foods | JD Sports vs. Fulcrum Metals PLC |
| Planet Fitness vs. JD Sports Fashion | Planet Fitness vs. Bloomsbury Publishing Plc | Planet Fitness vs. Arrow Electronics | Planet Fitness vs. Telecom Italia SpA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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