Correlation Between Salesforce and Act Financial
Can any of the company-specific risk be diversified away by investing in both Salesforce and Act Financial 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 Act Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Act Financial, you can compare the effects of market volatilities on Salesforce and Act Financial 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 Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Act Financial.
Diversification Opportunities for Salesforce and Act Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Act is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial 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 Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of Salesforce i.e., Salesforce and Act Financial go up and down completely randomly.
Pair Corralation between Salesforce and Act Financial
Considering the 90-day investment horizon Salesforce is expected to under-perform the Act Financial. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.15 times less risky than Act Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Act Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 343.00 in Act Financial on October 26, 2024 and sell it today you would lose (2.00) from holding Act Financial or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Salesforce vs. Act Financial
Performance |
| Timeline |
| Salesforce |
| Act Financial |
Salesforce and Act Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Act Financial
The main advantage of trading using opposite Salesforce and Act Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Act Financial 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 Act Financial will offset losses from the drop in Act Financial's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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