Correlation Between SHIMANO INC and Planet Fitness

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

By analyzing existing cross correlation between SHIMANO INC UNSPADR10 and Planet Fitness, you can compare the effects of market volatilities on SHIMANO INC 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 SHIMANO INC with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIMANO INC and Planet Fitness.

Diversification Opportunities for SHIMANO INC and Planet Fitness

-0.21

Correlation Coefficient

SHIMANO INC  Planet Fitness

Very good diversification

The 3 months correlation between SHIMANO and Planet is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SHIMANO INC UNSPADR10 and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and SHIMANO INC 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 SHIMANO INC UNSPADR10 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 SHIMANO INC i.e., SHIMANO INC and Planet Fitness go up and down completely randomly.

Pair Corralation between SHIMANO INC and Planet Fitness

Assuming the 90 days trading horizon SHIMANO INC UNSPADR10 is expected to under-perform the Planet Fitness. In addition to that, SHIMANO INC is 1.19 times more volatile than Planet Fitness. It trades about -0.04 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.12 per unit of volatility. If you would invest  8,300  in Planet Fitness on April 20, 2025 and sell it today you would earn a total of  1,150  from holding Planet Fitness or generate 13.86% return on investment over 90 days.

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

SHIMANO INC UNSPADR10  vs.  Planet Fitness

SHIMANO INC UNSPADR10

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHIMANO INC UNSPADR10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, SHIMANO INC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 fragile basic indicators, Planet Fitness reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SHIMANO INC and Planet Fitness

The main advantage of trading using opposite SHIMANO INC and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIMANO INC 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 SHIMANO INC UNSPADR10 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.