Correlation Between Target Healthcare and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Target Healthcare 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 Target Healthcare and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Healthcare REIT and Planet Fitness Cl, you can compare the effects of market volatilities on Target Healthcare 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 Target Healthcare with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Healthcare and Planet Fitness.
Diversification Opportunities for Target Healthcare and Planet Fitness
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Target and Planet is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Target Healthcare REIT 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 Target Healthcare 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 Target Healthcare REIT 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 Target Healthcare i.e., Target Healthcare and Planet Fitness go up and down completely randomly.
Pair Corralation between Target Healthcare and Planet Fitness
Assuming the 90 days trading horizon Target Healthcare REIT is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Target Healthcare REIT is 2.81 times less risky than Planet Fitness. The stock trades about -0.19 of its potential returns per unit of risk. The Planet Fitness Cl is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 8,127 in Planet Fitness Cl on August 28, 2024 and sell it today you would earn a total of 1,928 from holding Planet Fitness Cl or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target Healthcare REIT vs. Planet Fitness Cl
Performance |
| Timeline |
| Target Healthcare REIT |
| Planet Fitness Cl |
Target Healthcare and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Healthcare and Planet Fitness
The main advantage of trading using opposite Target Healthcare and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Healthcare 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.| Target Healthcare vs. Global Net Lease | Target Healthcare vs. New Residential Investment | Target Healthcare vs. Schroders Investment Trusts | Target Healthcare vs. Federal Realty Investment |
| Planet Fitness vs. Samsung Electronics Co | Planet Fitness vs. Samsung Electronics Co | Planet Fitness vs. Hyundai Motor | Planet Fitness vs. Toyota Motor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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