Correlation Between Planet Fitness and OneSpaWorld Holdings
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and OneSpaWorld Holdings 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 OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and OneSpaWorld Holdings, you can compare the effects of market volatilities on Planet Fitness and OneSpaWorld Holdings 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 OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and OneSpaWorld Holdings.
Diversification Opportunities for Planet Fitness and OneSpaWorld Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and OneSpaWorld is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings 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 OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Planet Fitness i.e., Planet Fitness and OneSpaWorld Holdings go up and down completely randomly.
Pair Corralation between Planet Fitness and OneSpaWorld Holdings
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.56 times less return on investment than OneSpaWorld Holdings. But when comparing it to its historical volatility, Planet Fitness is 1.0 times less risky than OneSpaWorld Holdings. It trades about 0.2 of its potential returns per unit of risk. OneSpaWorld Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,912 in OneSpaWorld Holdings on November 6, 2024 and sell it today you would earn a total of 209.00 from holding OneSpaWorld Holdings or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. OneSpaWorld Holdings
Performance |
| Timeline |
| Planet Fitness |
| OneSpaWorld Holdings |
Planet Fitness and OneSpaWorld Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and OneSpaWorld Holdings
The main advantage of trading using opposite Planet Fitness and OneSpaWorld Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, OneSpaWorld Holdings 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 OneSpaWorld Holdings will offset losses from the drop in OneSpaWorld Holdings' long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
| OneSpaWorld Holdings vs. Escalade Incorporated | OneSpaWorld Holdings vs. Johnson Outdoors | OneSpaWorld Holdings vs. Clarus Corp | OneSpaWorld Holdings vs. Six Flags Entertainment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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