Correlation Between Planet Fitness and Distoken Acquisition
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Distoken Acquisition 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 Distoken Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and Distoken Acquisition, you can compare the effects of market volatilities on Planet Fitness and Distoken Acquisition 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 Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Distoken Acquisition.
Diversification Opportunities for Planet Fitness and Distoken Acquisition
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Planet and Distoken is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition 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 are associated (or correlated) with Distoken Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distoken Acquisition has no effect on the direction of Planet Fitness i.e., Planet Fitness and Distoken Acquisition go up and down completely randomly.
Pair Corralation between Planet Fitness and Distoken Acquisition
Given the investment horizon of 90 days Planet Fitness is expected to generate 4.97 times more return on investment than Distoken Acquisition. However, Planet Fitness is 4.97 times more volatile than Distoken Acquisition. It trades about 0.15 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.12 per unit of risk. If you would invest 8,225 in Planet Fitness on September 25, 2024 and sell it today you would earn a total of 1,701 from holding Planet Fitness or generate 20.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Planet Fitness vs. Distoken Acquisition
Performance |
Timeline |
Planet Fitness |
Distoken Acquisition |
Planet Fitness and Distoken Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Planet Fitness and Distoken Acquisition
The main advantage of trading using opposite Planet Fitness and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Distoken Acquisition 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 Distoken Acquisition will offset losses from the drop in Distoken Acquisition's long position.Planet Fitness vs. Life Time Group | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment | Planet Fitness vs. Johnson Outdoors |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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