Correlation Between Planet Fitness and MBH PLC
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and MBH 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 MBH 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 MBH PLC, you can compare the effects of market volatilities on Planet Fitness and MBH 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 MBH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and MBH PLC.
Diversification Opportunities for Planet Fitness and MBH PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and MBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and MBH PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBH 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 MBH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBH PLC has no effect on the direction of Planet Fitness i.e., Planet Fitness and MBH PLC go up and down completely randomly.
Pair Corralation between Planet Fitness and MBH PLC
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.47 times more return on investment than MBH PLC. However, Planet Fitness is 1.47 times more volatile than MBH PLC. It trades about 0.1 of its potential returns per unit of risk. MBH PLC is currently generating about -0.06 per unit of risk. If you would invest 6,421 in Planet Fitness on September 14, 2024 and sell it today you would earn a total of 3,615 from holding Planet Fitness or generate 56.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. MBH PLC
Performance |
| Timeline |
| Planet Fitness |
| MBH PLC |
Planet Fitness and MBH PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and MBH PLC
The main advantage of trading using opposite Planet Fitness and MBH PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, MBH 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 MBH PLC will offset losses from the drop in MBH PLC's long position.The idea behind Planet Fitness and MBH PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MBH PLC vs. EvoAir Holdings | MBH PLC vs. Alaska Air Group | MBH PLC vs. Canlan Ice Sports | MBH PLC vs. Planet Fitness |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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