Correlation Between Planet Fitness and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Hyatt Hotels 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 Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Hyatt Hotels, you can compare the effects of market volatilities on Planet Fitness and Hyatt Hotels 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 Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Hyatt Hotels.
Diversification Opportunities for Planet Fitness and Hyatt Hotels
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Planet and Hyatt is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Planet Fitness i.e., Planet Fitness and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Planet Fitness and Hyatt Hotels
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.2 times more return on investment than Hyatt Hotels. However, Planet Fitness is 1.2 times more volatile than Hyatt Hotels. It trades about 0.06 of its potential returns per unit of risk. Hyatt Hotels is currently generating about 0.05 per unit of risk. If you would invest 6,829 in Planet Fitness on August 26, 2024 and sell it today you would earn a total of 3,324 from holding Planet Fitness or generate 48.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Hyatt Hotels
Performance |
| Timeline |
| Planet Fitness |
| Hyatt Hotels |
Planet Fitness and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Hyatt Hotels
The main advantage of trading using opposite Planet Fitness and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. InterContinental Hotels Group | Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels vs. Wyndham Hotels Resorts |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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