Correlation Between Planet Fitness and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Mesa Air 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 Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Mesa Air Group, you can compare the effects of market volatilities on Planet Fitness and Mesa Air 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 Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Mesa Air.
Diversification Opportunities for Planet Fitness and Mesa Air
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Mesa is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Planet Fitness i.e., Planet Fitness and Mesa Air go up and down completely randomly.
Pair Corralation between Planet Fitness and Mesa Air
Given the investment horizon of 90 days Planet Fitness is expected to generate 2.21 times less return on investment than Mesa Air. But when comparing it to its historical volatility, Planet Fitness is 3.0 times less risky than Mesa Air. It trades about 0.03 of its potential returns per unit of risk. Mesa Air Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Mesa Air Group on September 4, 2024 and sell it today you would lose (23.00) from holding Mesa Air Group or give up 18.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Mesa Air Group
Performance |
| Timeline |
| Planet Fitness |
| Mesa Air Group |
Planet Fitness and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Mesa Air
The main advantage of trading using opposite Planet Fitness and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air's long position.| Planet Fitness vs. Hyatt Hotels | Planet Fitness vs. Smart Share Global | Planet Fitness vs. Sweetgreen | Planet Fitness vs. Wyndham Hotels Resorts |
| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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