Correlation Between UnitedHealth Group and Planet Fitness

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

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

Diversification Opportunities for UnitedHealth Group and Planet Fitness

-0.19

Correlation Coefficient

UnitedHealth Group  Planet Fitness

Good diversification

The 3 months correlation between UnitedHealth and Planet is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and UnitedHealth Group 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 UnitedHealth Group Incorporated 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 UnitedHealth Group i.e., UnitedHealth Group and Planet Fitness go up and down completely randomly.

Pair Corralation between UnitedHealth Group and Planet Fitness

Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to under-perform the Planet Fitness. In addition to that, UnitedHealth Group is 4.6 times more volatile than Planet Fitness. It trades about -0.17 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  6,881  in Planet Fitness on March 31, 2025 and sell it today you would earn a total of  502.00  from holding Planet Fitness or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UnitedHealth Group Incorporate  vs.  Planet Fitness

UnitedHealth Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days UnitedHealth Group Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long term up-swing for the company 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 somewhat weak essential indicators, Planet Fitness may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with UnitedHealth Group and Planet Fitness

The main advantage of trading using opposite UnitedHealth Group and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group 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 UnitedHealth Group Incorporated 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.