Correlation Between Plby and Peloton Interactive
Can any of the company-specific risk be diversified away by investing in both Plby and Peloton Interactive 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 Plby and Peloton Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plby Group and Peloton Interactive, you can compare the effects of market volatilities on Plby and Peloton Interactive 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 Plby with a short position of Peloton Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plby and Peloton Interactive.
Diversification Opportunities for Plby and Peloton Interactive
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plby and Peloton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Plby Group and Peloton Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Interactive and Plby 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 Plby Group are associated (or correlated) with Peloton Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Interactive has no effect on the direction of Plby i.e., Plby and Peloton Interactive go up and down completely randomly.
Pair Corralation between Plby and Peloton Interactive
Given the investment horizon of 90 days Plby Group is expected to generate 1.16 times more return on investment than Peloton Interactive. However, Plby is 1.16 times more volatile than Peloton Interactive. It trades about 0.08 of its potential returns per unit of risk. Peloton Interactive is currently generating about 0.07 per unit of risk. If you would invest 64.00 in Plby Group on September 2, 2024 and sell it today you would earn a total of 74.00 from holding Plby Group or generate 115.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plby Group vs. Peloton Interactive
Performance |
| Timeline |
| Plby Group |
| Peloton Interactive |
Plby and Peloton Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plby and Peloton Interactive
The main advantage of trading using opposite Plby and Peloton Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plby position performs unexpectedly, Peloton Interactive 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 Peloton Interactive will offset losses from the drop in Peloton Interactive's long position.| Plby vs. Purecycle Technologies Holdings | Plby vs. Dolphin Entertainment | Plby vs. Hall of Fame | Plby vs. Funko Inc |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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