Correlation Between Planet Fitness and Salesforce
Can any of the company-specific risk be diversified away by investing in both Planet Fitness and Salesforce 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 Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Fitness and salesforce inc, you can compare the effects of market volatilities on Planet Fitness and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Fitness and Salesforce.
Diversification Opportunities for Planet Fitness and Salesforce
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Planet and Salesforce is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Planet Fitness and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of salesforce inc has no effect on the direction of Planet Fitness i.e., Planet Fitness and Salesforce go up and down completely randomly.
Pair Corralation between Planet Fitness and Salesforce
Assuming the 90 days trading horizon Planet Fitness is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Planet Fitness is 4.1 times less risky than Salesforce. The stock trades about -0.22 of its potential returns per unit of risk. The salesforce inc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7,237 in salesforce inc on January 26, 2025 and sell it today you would lose (300.00) from holding salesforce inc or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Planet Fitness vs. salesforce inc
Performance |
| Timeline |
| Planet Fitness |
| salesforce inc |
Planet Fitness and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Fitness and Salesforce
The main advantage of trading using opposite Planet Fitness and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Fitness position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| Planet Fitness vs. Metalrgica Riosulense SA | Planet Fitness vs. Costco Wholesale | Planet Fitness vs. Paycom Software | Planet Fitness vs. Public Storage |
| Salesforce vs. Truist Financial | Salesforce vs. Raymond James Financial, | Salesforce vs. Technos SA | Salesforce vs. Bank of America |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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