Correlation Between Johnson Outdoors and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors 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 Johnson Outdoors and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Outdoors and Planet Fitness, you can compare the effects of market volatilities on Johnson Outdoors 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 Johnson Outdoors with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Planet Fitness.
Diversification Opportunities for Johnson Outdoors and Planet Fitness
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Johnson and Planet is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Johnson Outdoors 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 Johnson Outdoors 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 Johnson Outdoors i.e., Johnson Outdoors and Planet Fitness go up and down completely randomly.
Pair Corralation between Johnson Outdoors and Planet Fitness
Given the investment horizon of 90 days Johnson Outdoors is expected to generate 8.52 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, Johnson Outdoors is 1.52 times less risky than Planet Fitness. It trades about 0.07 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.39 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Outdoors vs. Planet Fitness
Performance |
| Timeline |
| Johnson Outdoors |
| Planet Fitness |
Johnson Outdoors and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Outdoors and Planet Fitness
The main advantage of trading using opposite Johnson Outdoors and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Outdoors 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.| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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