Correlation Between Planet Fitness and Focusrite Plc
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Focusrite Plc 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 Focusrite Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Focusrite plc, you can compare the effects of market volatilities on Planet Fitness and Focusrite Plc 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 Focusrite Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Focusrite Plc.
Diversification Opportunities for Planet Fitness and Focusrite Plc
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Focusrite is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Focusrite plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focusrite plc 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 Focusrite Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focusrite plc has no effect on the direction of Planet Fitness i.e., Planet Fitness and Focusrite Plc go up and down completely randomly.
Pair Corralation between Planet Fitness and Focusrite Plc
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.05 times more return on investment than Focusrite Plc. However, Planet Fitness is 1.05 times more volatile than Focusrite plc. It trades about 0.04 of its potential returns per unit of risk. Focusrite plc is currently generating about -0.06 per unit of risk. If you would invest 7,827 in Planet Fitness on September 12, 2024 and sell it today you would earn a total of 2,395 from holding Planet Fitness or generate 30.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Planet Fitness vs. Focusrite plc
Performance |
| Timeline |
| Planet Fitness |
| Focusrite plc |
Planet Fitness and Focusrite Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Focusrite Plc
The main advantage of trading using opposite Planet Fitness and Focusrite Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Focusrite Plc 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 Focusrite Plc will offset losses from the drop in Focusrite Plc's long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
| Focusrite Plc vs. Callaway Golf | Focusrite Plc vs. Acushnet Holdings Corp | Focusrite Plc vs. Planet Fitness | Focusrite Plc vs. Bowlero 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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