Correlation Between Salesforce and FSP Technology
Can any of the company-specific risk be diversified away by investing in both Salesforce and FSP Technology 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 FSP Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and FSP Technology, you can compare the effects of market volatilities on Salesforce and FSP Technology 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 FSP Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and FSP Technology.
Diversification Opportunities for Salesforce and FSP Technology
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and FSP is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and FSP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSP Technology 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 FSP Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSP Technology has no effect on the direction of Salesforce i.e., Salesforce and FSP Technology go up and down completely randomly.
Pair Corralation between Salesforce and FSP Technology
Considering the 90-day investment horizon Salesforce is expected to generate 2.66 times less return on investment than FSP Technology. But when comparing it to its historical volatility, Salesforce is 1.07 times less risky than FSP Technology. It trades about 0.1 of its potential returns per unit of risk. FSP Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,070 in FSP Technology on November 5, 2024 and sell it today you would earn a total of 430.00 from holding FSP Technology or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Salesforce vs. FSP Technology
Performance |
| Timeline |
| Salesforce |
| FSP Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Salesforce and FSP Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and FSP Technology
The main advantage of trading using opposite Salesforce and FSP Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, FSP Technology 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 FSP Technology will offset losses from the drop in FSP Technology's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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.
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