Correlation Between Planet Fitness and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Costco Wholesale 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 Planet Fitness and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Costco Wholesale, you can compare the effects of market volatilities on Planet Fitness and Costco Wholesale 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 Planet Fitness with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Costco Wholesale.
Diversification Opportunities for Planet Fitness and Costco Wholesale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Costco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Planet Fitness 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 Planet Fitness are associated (or correlated) with Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale has no effect on the direction of Planet Fitness i.e., Planet Fitness and Costco Wholesale go up and down completely randomly.
Pair Corralation between Planet Fitness and Costco Wholesale
Assuming the 90 days trading horizon Planet Fitness is not expected to generate positive returns. However, Planet Fitness is 1.08 times less risky than Costco Wholesale. It waists most of its returns potential to compensate for thr risk taken. Costco Wholesale is generating about 0.17 per unit of risk. If you would invest 6,180 in Costco Wholesale on August 31, 2024 and sell it today you would earn a total of 8,324 from holding Costco Wholesale or generate 134.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Planet Fitness vs. Costco Wholesale
Performance |
| Timeline |
| Planet Fitness |
| Costco Wholesale |
Planet Fitness and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Costco Wholesale
The main advantage of trading using opposite Planet Fitness and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Planet Fitness vs. Cambuci SA | Planet Fitness vs. Bicicletas Monark SA | Planet Fitness vs. Fras le SA | Planet Fitness vs. Western Digital |
| Costco Wholesale vs. Walmart | Costco Wholesale vs. Fras le SA | Costco Wholesale vs. Energisa SA | Costco Wholesale vs. Clave Indices De |
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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