Correlation Between SHIP HEALTHCARE and Planet Fitness

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

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

Diversification Opportunities for SHIP HEALTHCARE and Planet Fitness

-0.69

Correlation Coefficient

SHIP HEALTHCARE  Planet Fitness

Excellent diversification

The 3 months correlation between SHIP and Planet is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Planet Fitness go up and down completely randomly.

Pair Corralation between SHIP HEALTHCARE and Planet Fitness

Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the Planet Fitness. In addition to that, SHIP HEALTHCARE is 1.1 times more volatile than Planet Fitness. It trades about -0.06 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.13 per unit of volatility. If you would invest  8,300  in Planet Fitness on April 22, 2025 and sell it today you would earn a total of  1,300  from holding Planet Fitness or generate 15.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SHIP HEALTHCARE HLDGINC  vs.  Planet Fitness

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Planet Fitness

Risk-Adjusted Performance

OK

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

Pair Trading with SHIP HEALTHCARE and Planet Fitness

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

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.