Correlation Between Planet Fitness and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Cracker Barrel 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 Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Cracker Barrel Old, you can compare the effects of market volatilities on Planet Fitness and Cracker Barrel 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 Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Cracker Barrel.
Diversification Opportunities for Planet Fitness and Cracker Barrel
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Cracker is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Cracker Barrel Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cracker Barrel Old 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 Cracker Barrel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cracker Barrel Old has no effect on the direction of Planet Fitness i.e., Planet Fitness and Cracker Barrel go up and down completely randomly.
Pair Corralation between Planet Fitness and Cracker Barrel
Given the investment horizon of 90 days Planet Fitness is expected to generate 0.59 times more return on investment than Cracker Barrel. However, Planet Fitness is 1.69 times less risky than Cracker Barrel. It trades about -0.12 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.49 per unit of risk. If you would invest 10,351 in Planet Fitness on November 27, 2024 and sell it today you would lose (427.00) from holding Planet Fitness or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Cracker Barrel Old
Performance |
| Timeline |
| Planet Fitness |
| Cracker Barrel Old |
Planet Fitness and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Cracker Barrel
The main advantage of trading using opposite Planet Fitness and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Cracker Barrel 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 Cracker Barrel will offset losses from the drop in Cracker Barrel's long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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