Correlation Between UPDATE SOFTWARE and Planet Fitness

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

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

Diversification Opportunities for UPDATE SOFTWARE and Planet Fitness

-0.22

Correlation Coefficient

UPDATE SOFTWARE  Planet Fitness

Very good diversification

The 3 months correlation between UPDATE and Planet is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding UPDATE SOFTWARE and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and UPDATE SOFTWARE 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 UPDATE SOFTWARE 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 UPDATE SOFTWARE i.e., UPDATE SOFTWARE and Planet Fitness go up and down completely randomly.

Pair Corralation between UPDATE SOFTWARE and Planet Fitness

Assuming the 90 days trading horizon UPDATE SOFTWARE is expected to generate 6.58 times less return on investment than Planet Fitness. In addition to that, UPDATE SOFTWARE is 1.57 times more volatile than Planet Fitness. It trades about 0.01 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.1 per unit of volatility. If you would invest  8,400  in Planet Fitness on April 24, 2025 and sell it today you would earn a total of  1,000.00  from holding Planet Fitness or generate 11.9% return on investment over 90 days.

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

UPDATE SOFTWARE  vs.  Planet Fitness

UPDATE SOFTWARE

Risk-Adjusted Performance

Very Weak

Over the last 90 days UPDATE SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, UPDATE SOFTWARE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Planet Fitness

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Planet Fitness may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with UPDATE SOFTWARE and Planet Fitness

The main advantage of trading using opposite UPDATE SOFTWARE and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPDATE SOFTWARE 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 UPDATE SOFTWARE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.