Correlation Between Planet Fitness and CTEEP Companhia

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

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

Diversification Opportunities for Planet Fitness and CTEEP Companhia

-0.27

Correlation Coefficient

Planet Fitness  CTEEP Companhia

Very good diversification

The 3 months correlation between Planet and CTEEP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and CTEEP Companhia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTEEP Companhia and Planet Fitness 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 Planet Fitness are associated (or correlated) with CTEEP Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTEEP Companhia has no effect on the direction of Planet Fitness i.e., Planet Fitness and CTEEP Companhia go up and down completely randomly.

Pair Corralation between Planet Fitness and CTEEP Companhia

Assuming the 90 days trading horizon Planet Fitness is expected to generate 0.98 times more return on investment than CTEEP Companhia. However, Planet Fitness is 1.03 times less risky than CTEEP Companhia. It trades about 0.07 of its potential returns per unit of risk. CTEEP Companhia is currently generating about 0.01 per unit of risk. If you would invest  6,881  in Planet Fitness on April 20, 2025 and sell it today you would earn a total of  315.00  from holding Planet Fitness or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Planet Fitness  vs.  CTEEP Companhia

Planet Fitness

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Planet Fitness is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CTEEP Companhia

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Planet Fitness and CTEEP Companhia

The main advantage of trading using opposite Planet Fitness and CTEEP Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, CTEEP Companhia 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 CTEEP Companhia will offset losses from the drop in CTEEP Companhia's long position.

The idea behind Planet Fitness and CTEEP Companhia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.