Correlation Between Perdoceo Education and Planet Fitness

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

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

Diversification Opportunities for Perdoceo Education and Planet Fitness

0.53

Correlation Coefficient

Perdoceo Education  Planet Fitness

Very weak diversification

The 3 months correlation between Perdoceo and Planet is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Perdoceo Education and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education i.e., Perdoceo Education and Planet Fitness go up and down completely randomly.

Pair Corralation between Perdoceo Education and Planet Fitness

Assuming the 90 days horizon Perdoceo Education is expected to generate 1.67 times more return on investment than Planet Fitness. However, Perdoceo Education is 1.67 times more volatile than Planet Fitness. It trades about 0.1 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.1 per unit of risk. If you would invest  2,152  in Perdoceo Education on April 24, 2025 and sell it today you would earn a total of  388.00  from holding Perdoceo Education or generate 18.03% return on investment over 90 days.

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

Perdoceo Education  vs.  Planet Fitness

Perdoceo Education

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perdoceo Education are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perdoceo Education reported solid returns over the last few months and may actually be approaching a breakup point.

Planet Fitness

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Planet Fitness may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Perdoceo Education and Planet Fitness

The main advantage of trading using opposite Perdoceo Education and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdoceo Education 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 Perdoceo Education 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.