Correlation Between Penn National and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Penn National and Planet Fitness 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 Penn National and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and Planet Fitness, you can compare the effects of market volatilities on Penn National and Planet Fitness 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 Penn National with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Planet Fitness.
Diversification Opportunities for Penn National and Planet Fitness
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penn and Planet is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Penn National 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 Penn National Gaming are associated (or correlated) with Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Penn National i.e., Penn National and Planet Fitness go up and down completely randomly.
Pair Corralation between Penn National and Planet Fitness
Assuming the 90 days horizon Penn National Gaming is expected to under-perform the Planet Fitness. In addition to that, Penn National is 2.16 times more volatile than Planet Fitness. It trades about -0.02 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.09 per unit of volatility. If you would invest 9,350 in Planet Fitness on October 30, 2024 and sell it today you would earn a total of 450.00 from holding Planet Fitness or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. Planet Fitness
Performance |
| Timeline |
| Penn National Gaming |
| Planet Fitness |
Penn National and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Planet Fitness
The main advantage of trading using opposite Penn National and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Planet Fitness 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 Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Penn National vs. TFS FINANCIAL | Penn National vs. SWISS WATER DECAFFCOFFEE | Penn National vs. BIOPHARMA CREDIT DL | Penn National vs. CITIC Telecom International |
| Planet Fitness vs. Booking Holdings | Planet Fitness vs. Oriental Land Co | Planet Fitness vs. ANTA Sports Products | Planet Fitness vs. Li Ning Company |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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