Correlation Between DXC Technology and Planet Fitness

Can any of the company-specific risk be diversified away by investing in both DXC Technology 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 DXC Technology and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DXC Technology Co and Planet Fitness Cl, you can compare the effects of market volatilities on DXC Technology 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 DXC Technology with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Planet Fitness.

Diversification Opportunities for DXC Technology and Planet Fitness

-0.23

Correlation Coefficient

DXC Technology  Planet Fitness

Very good diversification

The 3 months correlation between DXC and Planet is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co 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 DXC Technology 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 DXC Technology Co 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 DXC Technology i.e., DXC Technology and Planet Fitness go up and down completely randomly.

Pair Corralation between DXC Technology and Planet Fitness

Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the Planet Fitness. In addition to that, DXC Technology is 1.19 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 0.14 per unit of volatility. If you would invest  9,661  in Planet Fitness Cl on April 23, 2025 and sell it today you would earn a total of  1,471  from holding Planet Fitness Cl or generate 15.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

DXC Technology Co  vs.  Planet Fitness Cl

DXC Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days DXC Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DXC Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Planet Fitness Cl

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness Cl are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DXC Technology and Planet Fitness

The main advantage of trading using opposite DXC Technology and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology 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.

The idea behind DXC Technology Co and Planet Fitness Cl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.