Correlation Between Nikon Corp and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Nikon Corp 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 Nikon Corp and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikon Corp and Planet Fitness, you can compare the effects of market volatilities on Nikon Corp 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 Nikon Corp with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikon Corp and Planet Fitness.
Diversification Opportunities for Nikon Corp and Planet Fitness
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nikon and Planet is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nikon Corp and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Nikon Corp 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 Nikon Corp 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 Nikon Corp i.e., Nikon Corp and Planet Fitness go up and down completely randomly.
Pair Corralation between Nikon Corp and Planet Fitness
Assuming the 90 days horizon Nikon Corp is expected to under-perform the Planet Fitness. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nikon Corp is 1.08 times less risky than Planet Fitness. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Planet Fitness is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 7,850 in Planet Fitness on August 31, 2024 and sell it today you would earn a total of 2,252 from holding Planet Fitness or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikon Corp vs. Planet Fitness
Performance |
| Timeline |
| Nikon Corp |
| Planet Fitness |
Nikon Corp and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikon Corp and Planet Fitness
The main advantage of trading using opposite Nikon Corp and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikon Corp 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.| Nikon Corp vs. Yamaha Corp DRC | Nikon Corp vs. Planet Fitness | Nikon Corp vs. Plby Group | Nikon Corp vs. Shimano Inc ADR |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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