Correlation Between Hasbro and Planet Fitness

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

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

Diversification Opportunities for Hasbro and Planet Fitness

-0.59

Correlation Coefficient

Hasbro  Planet Fitness

Excellent diversification

The 3 months correlation between Hasbro and Planet is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Hasbro 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 Hasbro Inc 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 Hasbro i.e., Hasbro and Planet Fitness go up and down completely randomly.

Pair Corralation between Hasbro and Planet Fitness

Considering the 90-day investment horizon Hasbro Inc is expected to generate 1.69 times more return on investment than Planet Fitness. However, Hasbro is 1.69 times more volatile than Planet Fitness. It trades about 0.15 of its potential returns per unit of risk. Planet Fitness is currently generating about -0.17 per unit of risk. If you would invest  5,626  in Hasbro Inc on January 31, 2024 and sell it today you would earn a total of  504.00  from holding Hasbro Inc or generate 8.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Hasbro Inc  vs.  Planet Fitness

Hasbro Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hasbro Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Hasbro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Planet Fitness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Planet Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hasbro and Planet Fitness

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

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 Valuation module to check real value of public entities based on technical and fundamental data.