Correlation Between Planet Fitness and Cirmaker Technology
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Cirmaker Technology 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 Cirmaker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Cirmaker Technology, you can compare the effects of market volatilities on Planet Fitness and Cirmaker Technology 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 Cirmaker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Cirmaker Technology.
Diversification Opportunities for Planet Fitness and Cirmaker Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Cirmaker is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology 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 Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of Planet Fitness i.e., Planet Fitness and Cirmaker Technology go up and down completely randomly.
Pair Corralation between Planet Fitness and Cirmaker Technology
Given the investment horizon of 90 days Planet Fitness is expected to under-perform the Cirmaker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Planet Fitness is 2.69 times less risky than Cirmaker Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Cirmaker Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Cirmaker Technology on October 12, 2024 and sell it today you would earn a total of 0.90 from holding Cirmaker Technology or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Cirmaker Technology
Performance |
| Timeline |
| Planet Fitness |
| Cirmaker Technology |
Planet Fitness and Cirmaker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Cirmaker Technology
The main advantage of trading using opposite Planet Fitness and Cirmaker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Cirmaker Technology 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 Cirmaker Technology will offset losses from the drop in Cirmaker Technology'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 |
| Cirmaker Technology vs. Consol Energy | Cirmaker Technology vs. Playtika Holding Corp | Cirmaker Technology vs. Planet Fitness | Cirmaker Technology vs. Copperbank Resources Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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