Correlation Between United Rentals and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both United Rentals 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 United Rentals and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Planet Fitness, you can compare the effects of market volatilities on United Rentals 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 United Rentals with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Planet Fitness.
Diversification Opportunities for United Rentals and Planet Fitness
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Planet is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and United Rentals 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 United Rentals 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 United Rentals i.e., United Rentals and Planet Fitness go up and down completely randomly.
Pair Corralation between United Rentals and Planet Fitness
Assuming the 90 days trading horizon United Rentals is expected to generate 4.31 times less return on investment than Planet Fitness. But when comparing it to its historical volatility, United Rentals is 4.42 times less risky than Planet Fitness. It trades about 0.13 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,984 in Planet Fitness on September 12, 2024 and sell it today you would earn a total of 3,608 from holding Planet Fitness or generate 90.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. Planet Fitness
Performance |
Timeline |
United Rentals |
Planet Fitness |
United Rentals and Planet Fitness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Planet Fitness
The main advantage of trading using opposite United Rentals and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals 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.United Rentals vs. Localiza Rent a | United Rentals vs. Movida Participaes SA | United Rentals vs. Fundo Investimento Imobiliario | United Rentals vs. LESTE FDO INV |
Planet Fitness vs. Fundo Investimento Imobiliario | Planet Fitness vs. LESTE FDO INV | Planet Fitness vs. Fras le SA | Planet Fitness vs. Western Digital |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Bonds Directory Find actively traded corporate debentures issued by US companies |