Correlation Between Planet Fitness and Contagious Gaming
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Contagious Gaming 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 Contagious Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Contagious Gaming, you can compare the effects of market volatilities on Planet Fitness and Contagious Gaming 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 Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Contagious Gaming.
Diversification Opportunities for Planet Fitness and Contagious Gaming
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming 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 Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of Planet Fitness i.e., Planet Fitness and Contagious Gaming go up and down completely randomly.
Pair Corralation between Planet Fitness and Contagious Gaming
Given the investment horizon of 90 days Planet Fitness is expected to generate 0.44 times more return on investment than Contagious Gaming. However, Planet Fitness is 2.28 times less risky than Contagious Gaming. It trades about 0.06 of its potential returns per unit of risk. Contagious Gaming is currently generating about -0.06 per unit of risk. If you would invest 6,942 in Planet Fitness on September 4, 2024 and sell it today you would earn a total of 3,016 from holding Planet Fitness or generate 43.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Contagious Gaming
Performance |
| Timeline |
| Planet Fitness |
| Contagious Gaming |
Planet Fitness and Contagious Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Contagious Gaming
The main advantage of trading using opposite Planet Fitness and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.| Planet Fitness vs. Hyatt Hotels | Planet Fitness vs. Smart Share Global | Planet Fitness vs. Sweetgreen | Planet Fitness vs. Wyndham Hotels Resorts |
| Contagious Gaming vs. ArcelorMittal SA ADR | Contagious Gaming vs. Universal Music Group | Contagious Gaming vs. RBC Bearings Incorporated | Contagious Gaming vs. CECO Environmental 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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