Correlation Between Naked Wines and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Naked Wines 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 Naked Wines and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Planet Fitness Cl, you can compare the effects of market volatilities on Naked Wines 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 Naked Wines with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Planet Fitness.
Diversification Opportunities for Naked Wines and Planet Fitness
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Planet is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc 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 Naked Wines 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 Naked Wines plc 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 Naked Wines i.e., Naked Wines and Planet Fitness go up and down completely randomly.
Pair Corralation between Naked Wines and Planet Fitness
Assuming the 90 days trading horizon Naked Wines is expected to generate 2.64 times less return on investment than Planet Fitness. In addition to that, Naked Wines is 1.46 times more volatile than Planet Fitness Cl. It trades about 0.02 of its total potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.08 per unit of volatility. If you would invest 6,959 in Planet Fitness Cl on September 12, 2024 and sell it today you would earn a total of 3,251 from holding Planet Fitness Cl or generate 46.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
Naked Wines plc vs. Planet Fitness Cl
Performance |
| Timeline |
| Naked Wines plc |
| Planet Fitness Cl |
Naked Wines and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Planet Fitness
The main advantage of trading using opposite Naked Wines and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines 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.| Naked Wines vs. Hyundai Motor | Naked Wines vs. Toyota Motor Corp | Naked Wines vs. SoftBank Group Corp | Naked Wines vs. Halyk Bank of |
| Planet Fitness vs. Ebro Foods | Planet Fitness vs. Naked Wines plc | Planet Fitness vs. One Media iP | Planet Fitness vs. Zinc Media Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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