Correlation Between Planet Fitness and SeaWorld Entertainment
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and SeaWorld Entertainment 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 SeaWorld Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and SeaWorld Entertainment, you can compare the effects of market volatilities on Planet Fitness and SeaWorld Entertainment 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 SeaWorld Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and SeaWorld Entertainment.
Diversification Opportunities for Planet Fitness and SeaWorld Entertainment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and SeaWorld is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and SeaWorld Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaWorld Entertainment 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 SeaWorld Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaWorld Entertainment has no effect on the direction of Planet Fitness i.e., Planet Fitness and SeaWorld Entertainment go up and down completely randomly.
Pair Corralation between Planet Fitness and SeaWorld Entertainment
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.01 times more return on investment than SeaWorld Entertainment. However, Planet Fitness is 1.01 times more volatile than SeaWorld Entertainment. It trades about 0.03 of its potential returns per unit of risk. SeaWorld Entertainment is currently generating about -0.05 per unit of risk. If you would invest 8,168 in Planet Fitness on August 27, 2024 and sell it today you would earn a total of 1,985 from holding Planet Fitness or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.71% |
| Values | Daily Returns |
Planet Fitness vs. SeaWorld Entertainment
Performance |
| Timeline |
| Planet Fitness |
| SeaWorld Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Planet Fitness and SeaWorld Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and SeaWorld Entertainment
The main advantage of trading using opposite Planet Fitness and SeaWorld Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, SeaWorld Entertainment 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 SeaWorld Entertainment will offset losses from the drop in SeaWorld Entertainment's long position.| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
| SeaWorld Entertainment vs. JAKKS Pacific | SeaWorld Entertainment vs. OneSpaWorld Holdings | SeaWorld Entertainment vs. Clarus Corp | SeaWorld Entertainment 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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