Correlation Between Planet Fitness and Central Asia
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Central Asia 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 Planet Fitness and Central Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness Cl and Central Asia Metals, you can compare the effects of market volatilities on Planet Fitness and Central Asia 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 Planet Fitness with a short position of Central Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Central Asia.
Diversification Opportunities for Planet Fitness and Central Asia
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Planet and Central is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness Cl and Central Asia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Asia Metals and Planet Fitness 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 Planet Fitness Cl are associated (or correlated) with Central Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Asia Metals has no effect on the direction of Planet Fitness i.e., Planet Fitness and Central Asia go up and down completely randomly.
Pair Corralation between Planet Fitness and Central Asia
Assuming the 90 days trading horizon Planet Fitness Cl is expected to generate 1.71 times more return on investment than Central Asia. However, Planet Fitness is 1.71 times more volatile than Central Asia Metals. It trades about 0.14 of its potential returns per unit of risk. Central Asia Metals is currently generating about -0.23 per unit of risk. If you would invest 8,256 in Planet Fitness Cl on September 26, 2024 and sell it today you would earn a total of 1,831 from holding Planet Fitness Cl or generate 22.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 96.88% |
Values | Daily Returns |
Planet Fitness Cl vs. Central Asia Metals
Performance |
Timeline |
Planet Fitness Cl |
Central Asia Metals |
Planet Fitness and Central Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Fitness and Central Asia
The main advantage of trading using opposite Planet Fitness and Central Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Central Asia 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 Central Asia will offset losses from the drop in Central Asia's long position.Planet Fitness vs. Silvercorp Metals | Planet Fitness vs. Ocean Harvest Technology | Planet Fitness vs. Roadside Real Estate | Planet Fitness vs. McEwen Mining |
Central Asia vs. Givaudan SA | Central Asia vs. Antofagasta PLC | Central Asia vs. Ferrexpo PLC | Central Asia vs. Atalaya Mining |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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