Correlation Between River and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both River 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 River and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between River and Mercantile and Planet Fitness Cl, you can compare the effects of market volatilities on River 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 River with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of River and Planet Fitness.
Diversification Opportunities for River and Planet Fitness
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between River and Planet is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding River and Mercantile and Planet Fitness Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness Cl and River 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 River and Mercantile 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 Cl has no effect on the direction of River i.e., River and Planet Fitness go up and down completely randomly.
Pair Corralation between River and Planet Fitness
Assuming the 90 days trading horizon River and Mercantile is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, River and Mercantile is 3.53 times less risky than Planet Fitness. The stock trades about -0.04 of its potential returns per unit of risk. The Planet Fitness Cl is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10,023 in Planet Fitness Cl on November 4, 2024 and sell it today you would earn a total of 891.00 from holding Planet Fitness Cl or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
River and Mercantile vs. Planet Fitness Cl
Performance |
| Timeline |
| River and Mercantile |
| Planet Fitness Cl |
River and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with River and Planet Fitness
The main advantage of trading using opposite River and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if River 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.| River vs. Fidelity National Information | River vs. Datalogic | River vs. Creo Medical Group | River vs. Advanced Medical Solutions |
| Planet Fitness vs. Smithson Investment Trust | Planet Fitness vs. JPMorgan Japanese Investment | Planet Fitness vs. Trainline Plc | Planet Fitness vs. Norman Broadbent Plc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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