Correlation Between Vulcan Materials and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials 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 Vulcan Materials and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Planet Fitness, you can compare the effects of market volatilities on Vulcan Materials 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 Vulcan Materials with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Planet Fitness.
Diversification Opportunities for Vulcan Materials and Planet Fitness
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vulcan and Planet is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials i.e., Vulcan Materials and Planet Fitness go up and down completely randomly.
Pair Corralation between Vulcan Materials and Planet Fitness
Assuming the 90 days horizon Vulcan Materials is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, Vulcan Materials is 1.27 times less risky than Planet Fitness. The stock trades about -0.29 of its potential returns per unit of risk. The Planet Fitness is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,900 in Planet Fitness on October 11, 2024 and sell it today you would earn a total of 600.00 from holding Planet Fitness or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Planet Fitness
Performance |
| Timeline |
| Vulcan Materials |
| Planet Fitness |
Vulcan Materials and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Planet Fitness
The main advantage of trading using opposite Vulcan Materials and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials 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.| Vulcan Materials vs. TITANIUM TRANSPORTGROUP | Vulcan Materials vs. Yuexiu Transport Infrastructure | Vulcan Materials vs. AEGEAN AIRLINES | Vulcan Materials vs. COLUMBIA SPORTSWEAR |
| Planet Fitness vs. Compagnie Plastic Omnium | Planet Fitness vs. SANOK RUBBER ZY | Planet Fitness vs. VULCAN MATERIALS | Planet Fitness vs. Lifeway Foods |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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