Correlation Between RATIONAL Aktiengesellscha and Planet Fitness

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

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

Diversification Opportunities for RATIONAL Aktiengesellscha and Planet Fitness

-0.43

Correlation Coefficient

RATIONAL Aktiengesellscha  Planet Fitness

Very good diversification

The 3 months correlation between RATIONAL and Planet is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding RATIONAL Aktiengesellschaft and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft 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 RATIONAL Aktiengesellscha i.e., RATIONAL Aktiengesellscha and Planet Fitness go up and down completely randomly.

Pair Corralation between RATIONAL Aktiengesellscha and Planet Fitness

Assuming the 90 days trading horizon RATIONAL Aktiengesellschaft is expected to under-perform the Planet Fitness. But the stock apears to be less risky and, when comparing its historical volatility, RATIONAL Aktiengesellschaft is 1.34 times less risky than Planet Fitness. The stock trades about -0.03 of its potential returns per unit of risk. The Planet Fitness is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  8,400  in Planet Fitness on April 24, 2025 and sell it today you would earn a total of  1,250  from holding Planet Fitness or generate 14.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

RATIONAL Aktiengesellschaft  vs.  Planet Fitness

RATIONAL Aktiengesellscha

Risk-Adjusted Performance

Very Weak

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

Planet Fitness

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Planet Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RATIONAL Aktiengesellscha and Planet Fitness

The main advantage of trading using opposite RATIONAL Aktiengesellscha and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.