Correlation Between Planet Fitness and Marine Products
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Marine Products 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 Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Marine Products, you can compare the effects of market volatilities on Planet Fitness and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Marine Products.
Diversification Opportunities for Planet Fitness and Marine Products
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Planet and Marine is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Planet Fitness i.e., Planet Fitness and Marine Products go up and down completely randomly.
Pair Corralation between Planet Fitness and Marine Products
Given the investment horizon of 90 days Planet Fitness is expected to generate 0.87 times more return on investment than Marine Products. However, Planet Fitness is 1.15 times less risky than Marine Products. It trades about 0.03 of its potential returns per unit of risk. Marine Products is currently generating about -0.01 per unit of risk. If you would invest 8,192 in Planet Fitness on October 25, 2024 and sell it today you would earn a total of 2,349 from holding Planet Fitness or generate 28.67% 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. Marine Products
Performance |
| Timeline |
| Planet Fitness |
| Marine Products |
Planet Fitness and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Marine Products
The main advantage of trading using opposite Planet Fitness and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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