Correlation Between Planet Fitness and Shimano
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Shimano 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 Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Shimano Inc ADR, you can compare the effects of market volatilities on Planet Fitness and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Shimano.
Diversification Opportunities for Planet Fitness and Shimano
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and Shimano is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of Planet Fitness i.e., Planet Fitness and Shimano go up and down completely randomly.
Pair Corralation between Planet Fitness and Shimano
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.37 times more return on investment than Shimano. However, Planet Fitness is 1.37 times more volatile than Shimano Inc ADR. It trades about 0.44 of its potential returns per unit of risk. Shimano Inc ADR is currently generating about -0.12 per unit of risk. If you would invest 7,850 in Planet Fitness on August 31, 2024 and sell it today you would earn a total of 2,252 from holding Planet Fitness or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Fitness vs. Shimano Inc ADR
Performance |
| Timeline |
| Planet Fitness |
| Shimano Inc ADR |
Planet Fitness and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Shimano
The main advantage of trading using opposite Planet Fitness and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano'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 |
| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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