Correlation Between Planet Fitness and Saratoga Investment

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

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

Diversification Opportunities for Planet Fitness and Saratoga Investment

-0.56

Correlation Coefficient

Planet Fitness  Saratoga Investment

Excellent diversification

The 3 months correlation between Planet and Saratoga is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Planet Fitness i.e., Planet Fitness and Saratoga Investment go up and down completely randomly.

Pair Corralation between Planet Fitness and Saratoga Investment

Given the investment horizon of 90 days Planet Fitness is expected to under-perform the Saratoga Investment. In addition to that, Planet Fitness is 2.15 times more volatile than Saratoga Investment Corp. It trades about -0.15 of its total potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.12 per unit of volatility. If you would invest  2,312  in Saratoga Investment Corp on February 6, 2024 and sell it today you would earn a total of  45.00  from holding Saratoga Investment Corp or generate 1.95% return on investment over 90 days.

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

Planet Fitness  vs.  Saratoga Investment Corp

Planet Fitness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Planet Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Saratoga Investment Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saratoga Investment Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Saratoga Investment is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Planet Fitness and Saratoga Investment

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

The idea behind Planet Fitness and Saratoga Investment Corp 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.