Correlation Between Planet Fitness and Weyco
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Weyco Group, you can compare the effects of market volatilities on Planet Fitness and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Weyco.
Diversification Opportunities for Planet Fitness and Weyco
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Planet and Weyco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Planet Fitness i.e., Planet Fitness and Weyco go up and down completely randomly.
Pair Corralation between Planet Fitness and Weyco
Given the investment horizon of 90 days Planet Fitness is expected to generate 1.36 times less return on investment than Weyco. But when comparing it to its historical volatility, Planet Fitness is 1.01 times less risky than Weyco. It trades about 0.03 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,422 in Weyco Group on September 3, 2024 and sell it today you would earn a total of 1,149 from holding Weyco Group or generate 47.44% 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. Weyco Group
Performance |
| Timeline |
| Planet Fitness |
| Weyco Group |
Planet Fitness and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Weyco
The main advantage of trading using opposite Planet Fitness and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco'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 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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