Correlation Between Planet Fitness and CSL

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

By analyzing existing cross correlation between Planet Fitness and CSL LTD SPONADR, you can compare the effects of market volatilities on Planet Fitness and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and CSL.

Diversification Opportunities for Planet Fitness and CSL

0.39

Correlation Coefficient

Planet Fitness  CSL

Weak diversification

The 3 months correlation between Planet and CSL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Planet Fitness i.e., Planet Fitness and CSL go up and down completely randomly.

Pair Corralation between Planet Fitness and CSL

Assuming the 90 days horizon Planet Fitness is expected to generate 1.12 times more return on investment than CSL. However, Planet Fitness is 1.12 times more volatile than CSL LTD SPONADR. It trades about 0.09 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.04 per unit of risk. If you would invest  8,650  in Planet Fitness on May 5, 2025 and sell it today you would earn a total of  850.00  from holding Planet Fitness or generate 9.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Planet Fitness  vs.  CSL LTD SPONADR

Planet Fitness

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Fitness are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Planet Fitness may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CSL LTD SPONADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSL LTD SPONADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, CSL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Planet Fitness and CSL

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

The idea behind Planet Fitness and CSL LTD SPONADR 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.