Correlation Between Planet Fitness and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Ross Stores, you can compare the effects of market volatilities on Planet Fitness and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Ross Stores.
Diversification Opportunities for Planet Fitness and Ross Stores
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Ross is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Planet Fitness i.e., Planet Fitness and Ross Stores go up and down completely randomly.
Pair Corralation between Planet Fitness and Ross Stores
If you would invest 40,221 in Ross Stores on August 30, 2024 and sell it today you would earn a total of 5,589 from holding Ross Stores or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Ross Stores
Performance |
| Timeline |
| Planet Fitness |
| Ross Stores |
Planet Fitness and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Ross Stores
The main advantage of trading using opposite Planet Fitness and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Planet Fitness vs. T4F Entretenimento SA | Planet Fitness vs. Manufatura de Brinquedos | Planet Fitness vs. Manufatura de Brinquedos |
| Ross Stores vs. Monster Beverage | Ross Stores vs. Mitsubishi UFJ Financial | Ross Stores vs. Tyson Foods | Ross Stores vs. Sumitomo Mitsui Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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