Correlation Between Salesforce and Frost Credit
Can any of the company-specific risk be diversified away by investing in both Salesforce and Frost Credit 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 Frost Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Frost Credit Fund, you can compare the effects of market volatilities on Salesforce and Frost Credit 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 Frost Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Frost Credit.
Diversification Opportunities for Salesforce and Frost Credit
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Frost is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Frost Credit Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Credit 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 Frost Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Credit has no effect on the direction of Salesforce i.e., Salesforce and Frost Credit go up and down completely randomly.
Pair Corralation between Salesforce and Frost Credit
Considering the 90-day investment horizon Salesforce is expected to generate 9.55 times more return on investment than Frost Credit. However, Salesforce is 9.55 times more volatile than Frost Credit Fund. It trades about 0.28 of its potential returns per unit of risk. Frost Credit Fund is currently generating about 0.1 per unit of risk. If you would invest 29,137 in Salesforce on September 1, 2024 and sell it today you would earn a total of 3,862 from holding Salesforce or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Frost Credit Fund
Performance |
| Timeline |
| Salesforce |
| Frost Credit |
Salesforce and Frost Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Frost Credit
The main advantage of trading using opposite Salesforce and Frost Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Frost Credit 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 Frost Credit will offset losses from the drop in Frost Credit's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Frost Credit vs. Frost Growth Equity | Frost Credit vs. Frost Low Duration | Frost Credit vs. Frost Total Return | Frost Credit vs. Frost Total Return |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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