Correlation Between Planet Fitness and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Sealed 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 Sealed 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 Sealed Air, you can compare the effects of market volatilities on Planet Fitness and Sealed 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Sealed Air.
Diversification Opportunities for Planet Fitness and Sealed Air
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Planet and Sealed is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of Planet Fitness i.e., Planet Fitness and Sealed Air go up and down completely randomly.
Pair Corralation between Planet Fitness and Sealed Air
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.44 times more return on investment than Sealed Air. However, Planet Fitness is 1.44 times more volatile than Sealed Air. It trades about 0.22 of its potential returns per unit of risk. Sealed Air is currently generating about 0.04 per unit of risk. If you would invest 8,225 in Planet Fitness on August 26, 2024 and sell it today you would earn a total of 1,928 from holding Planet Fitness or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Sealed Air
Performance |
| Timeline |
| Planet Fitness |
| Sealed Air |
Planet Fitness and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Sealed Air
The main advantage of trading using opposite Planet Fitness and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Sealed 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 Sealed Air will offset losses from the drop in Sealed Air'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 |
| Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Reynolds Consumer Products | Sealed Air vs. Ball Corporation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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