Correlation Between Johnson Matthey and Planet Fitness

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

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

Diversification Opportunities for Johnson Matthey and Planet Fitness

0.93

Correlation Coefficient

Johnson Matthey  Planet Fitness

Almost no diversification

The 3 months correlation between Johnson and Planet is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Matthey PLC 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 Johnson Matthey 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 Johnson Matthey PLC 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 Johnson Matthey i.e., Johnson Matthey and Planet Fitness go up and down completely randomly.

Pair Corralation between Johnson Matthey and Planet Fitness

Assuming the 90 days trading horizon Johnson Matthey PLC is expected to generate 1.99 times more return on investment than Planet Fitness. However, Johnson Matthey is 1.99 times more volatile than Planet Fitness Cl. It trades about 0.21 of its potential returns per unit of risk. Planet Fitness Cl is currently generating about 0.16 per unit of risk. If you would invest  117,349  in Johnson Matthey PLC on April 20, 2025 and sell it today you would earn a total of  70,951  from holding Johnson Matthey PLC or generate 60.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	88.71%
Values	Daily Returns

Johnson Matthey PLC  vs.  Planet Fitness Cl

Johnson Matthey PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Matthey PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Johnson Matthey unveiled solid returns over the last few months and may actually be approaching a breakup point.

Planet Fitness Cl

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness Cl are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Planet Fitness unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Johnson Matthey and Planet Fitness

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

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.