Correlation Between Planet Fitness and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and CERo Therapeutics 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 CERo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and CERo Therapeutics Holdings, you can compare the effects of market volatilities on Planet Fitness and CERo Therapeutics 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 CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and CERo Therapeutics.
Diversification Opportunities for Planet Fitness and CERo Therapeutics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and CERo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Planet Fitness i.e., Planet Fitness and CERo Therapeutics go up and down completely randomly.
Pair Corralation between Planet Fitness and CERo Therapeutics
Given the investment horizon of 90 days Planet Fitness is expected to generate 16.51 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Planet Fitness is 18.48 times less risky than CERo Therapeutics. It trades about 0.15 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.85 in CERo Therapeutics Holdings on October 13, 2024 and sell it today you would lose (0.14) from holding CERo Therapeutics Holdings or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.32% |
| Values | Daily Returns |
Planet Fitness vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| Planet Fitness |
| CERo Therapeutics |
Planet Fitness and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and CERo Therapeutics
The main advantage of trading using opposite Planet Fitness and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, CERo Therapeutics 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 CERo Therapeutics will offset losses from the drop in CERo Therapeutics' long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
| CERo Therapeutics vs. Inhibrx | CERo Therapeutics vs. Astral Foods Limited | CERo Therapeutics vs. United Natural Foods | CERo Therapeutics vs. Acumen Pharmaceuticals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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