Correlation Between Planet Fitness and Johnson Outdoors
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Johnson Outdoors 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 Johnson Outdoors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Johnson Outdoors, you can compare the effects of market volatilities on Planet Fitness and Johnson Outdoors 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 Johnson Outdoors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Johnson Outdoors.
Diversification Opportunities for Planet Fitness and Johnson Outdoors
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Johnson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Johnson Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Outdoors 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 Johnson Outdoors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Outdoors has no effect on the direction of Planet Fitness i.e., Planet Fitness and Johnson Outdoors go up and down completely randomly.
Pair Corralation between Planet Fitness and Johnson Outdoors
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.08 times more return on investment than Johnson Outdoors. However, Planet Fitness is 1.08 times more volatile than Johnson Outdoors. It trades about 0.03 of its potential returns per unit of risk. Johnson Outdoors is currently generating about -0.05 per unit of risk. If you would invest 8,168 in Planet Fitness on August 27, 2024 and sell it today you would earn a total of 1,985 from holding Planet Fitness or generate 24.3% 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. Johnson Outdoors
Performance |
| Timeline |
| Planet Fitness |
| Johnson Outdoors |
Planet Fitness and Johnson Outdoors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Johnson Outdoors
The main advantage of trading using opposite Planet Fitness and Johnson Outdoors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Johnson Outdoors 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 Johnson Outdoors will offset losses from the drop in Johnson Outdoors' long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |