Correlation Between One Media and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both One Media 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 One Media and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Planet Fitness Cl, you can compare the effects of market volatilities on One Media 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 One Media with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Planet Fitness.
Diversification Opportunities for One Media and Planet Fitness
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between One and Planet is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP 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 One Media 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 One Media iP 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 One Media i.e., One Media and Planet Fitness go up and down completely randomly.
Pair Corralation between One Media and Planet Fitness
Assuming the 90 days trading horizon One Media iP is expected to generate 2.61 times more return on investment than Planet Fitness. However, One Media is 2.61 times more volatile than Planet Fitness Cl. It trades about 0.19 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.33 per unit of risk. If you would invest 375.00 in One Media iP on September 13, 2024 and sell it today you would earn a total of 50.00 from holding One Media iP or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
One Media iP vs. Planet Fitness Cl
Performance |
| Timeline |
| One Media iP |
| Planet Fitness Cl |
One Media and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Planet Fitness
The main advantage of trading using opposite One Media and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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.| One Media vs. Catalyst Media Group | One Media vs. CATLIN GROUP | One Media vs. RTW Venture Fund | One Media vs. SANTANDER UK 10 |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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