Correlation Between Planet Fitness and JD Sports
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and JD Sports 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 JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and JD Sports Fashion, you can compare the effects of market volatilities on Planet Fitness and JD Sports 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 JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and JD Sports.
Diversification Opportunities for Planet Fitness and JD Sports
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and JDSPY is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Planet Fitness i.e., Planet Fitness and JD Sports go up and down completely randomly.
Pair Corralation between Planet Fitness and JD Sports
Given the investment horizon of 90 days Planet Fitness is expected to generate 0.48 times more return on investment than JD Sports. However, Planet Fitness is 2.09 times less risky than JD Sports. It trades about 0.39 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.16 per unit of risk. If you would invest 8,014 in Planet Fitness on August 30, 2024 and sell it today you would earn a total of 2,088 from holding Planet Fitness or generate 26.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. JD Sports Fashion
Performance |
| Timeline |
| Planet Fitness |
| JD Sports Fashion |
Planet Fitness and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and JD Sports
The main advantage of trading using opposite Planet Fitness and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| Planet Fitness vs. Chipotle Mexican Grill | Planet Fitness vs. Yum Brands | Planet Fitness vs. The Wendys Co | Planet Fitness vs. McDonalds |
| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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