Correlation Between Planet Fitness and Dell Technologies
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Dell Technologies 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 Dell Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Dell Technologies, you can compare the effects of market volatilities on Planet Fitness and Dell Technologies 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 Dell Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Dell Technologies.
Diversification Opportunities for Planet Fitness and Dell Technologies
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and Dell is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Dell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dell Technologies 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 Dell Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dell Technologies has no effect on the direction of Planet Fitness i.e., Planet Fitness and Dell Technologies go up and down completely randomly.
Pair Corralation between Planet Fitness and Dell Technologies
Assuming the 90 days trading horizon Planet Fitness is expected to generate 2.56 times less return on investment than Dell Technologies. In addition to that, Planet Fitness is 1.17 times more volatile than Dell Technologies. It trades about 0.03 of its total potential returns per unit of risk. Dell Technologies is currently generating about 0.1 per unit of volatility. If you would invest 18,720 in Dell Technologies on November 28, 2024 and sell it today you would earn a total of 45,205 from holding Dell Technologies or generate 241.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.79% |
| Values | Daily Returns |
Planet Fitness vs. Dell Technologies
Performance |
| Timeline |
| Planet Fitness |
| Dell Technologies |
Planet Fitness and Dell Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Dell Technologies
The main advantage of trading using opposite Planet Fitness and Dell Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Dell Technologies 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 Dell Technologies will offset losses from the drop in Dell Technologies' long position.| Planet Fitness vs. TechnipFMC plc | Planet Fitness vs. Micron Technology | Planet Fitness vs. Pure Storage, | Planet Fitness vs. Air Products and |
| Dell Technologies vs. GP Investments | Dell Technologies vs. Automatic Data Processing | Dell Technologies vs. PENN Entertainment, | Dell Technologies vs. Chunghwa Telecom Co, |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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