Correlation Between Planet Fitness and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Vipshop Holdings 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 Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Vipshop Holdings Limited, you can compare the effects of market volatilities on Planet Fitness and Vipshop Holdings 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 Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Vipshop Holdings.
Diversification Opportunities for Planet Fitness and Vipshop Holdings
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Planet and Vipshop is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings 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 Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Planet Fitness i.e., Planet Fitness and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Planet Fitness and Vipshop Holdings
Assuming the 90 days trading horizon Planet Fitness is expected to generate 1.3 times more return on investment than Vipshop Holdings. However, Planet Fitness is 1.3 times more volatile than Vipshop Holdings Limited. It trades about 0.03 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about 0.03 per unit of risk. If you would invest 5,128 in Planet Fitness on September 13, 2024 and sell it today you would earn a total of 2,512 from holding Planet Fitness or generate 48.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.02% |
| Values | Daily Returns |
Planet Fitness vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Planet Fitness |
| Vipshop Holdings |
Planet Fitness and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Vipshop Holdings
The main advantage of trading using opposite Planet Fitness and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| Planet Fitness vs. Fundo Investimento Imobiliario | Planet Fitness vs. LESTE FDO INV | Planet Fitness vs. Fras le SA | Planet Fitness vs. Western Digital |
| Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Amazon Inc | Vipshop Holdings vs. Pinduoduo | Vipshop Holdings vs. JD Inc |
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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