Correlation Between Salesforce and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Salesforce and AFC Gamma 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 AFC Gamma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and AFC Gamma, you can compare the effects of market volatilities on Salesforce and AFC Gamma 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 AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and AFC Gamma.
Diversification Opportunities for Salesforce and AFC Gamma
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and AFC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma 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 AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Salesforce i.e., Salesforce and AFC Gamma go up and down completely randomly.
Pair Corralation between Salesforce and AFC Gamma
Considering the 90-day investment horizon Salesforce is expected to under-perform the AFC Gamma. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.71 times less risky than AFC Gamma. The stock trades about -0.29 of its potential returns per unit of risk. The AFC Gamma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 862.00 in AFC Gamma on October 21, 2024 and sell it today you would earn a total of 0.00 from holding AFC Gamma or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. AFC Gamma
Performance |
| Timeline |
| Salesforce |
| AFC Gamma |
Salesforce and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and AFC Gamma
The main advantage of trading using opposite Salesforce and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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