Correlation Between Salesforce and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Salesforce 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 Salesforce and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Planet Fitness, you can compare the effects of market volatilities on Salesforce 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 Salesforce with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Planet Fitness.
Diversification Opportunities for Salesforce and Planet Fitness
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Planet is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Planet Fitness go up and down completely randomly.
Pair Corralation between Salesforce and Planet Fitness
Considering the 90-day investment horizon Salesforce is expected to generate 0.81 times more return on investment than Planet Fitness. However, Salesforce is 1.23 times less risky than Planet Fitness. It trades about 0.24 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.17 per unit of risk. If you would invest 26,486 in Salesforce on August 26, 2024 and sell it today you would earn a total of 7,716 from holding Salesforce or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Planet Fitness
Performance |
| Timeline |
| Salesforce |
| Planet Fitness |
Salesforce and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Planet Fitness
The main advantage of trading using opposite Salesforce and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |