Correlation Between Salesforce and Franklin Floating
Can any of the company-specific risk be diversified away by investing in both Salesforce and Franklin Floating 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 Franklin Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Franklin Floating Rate, you can compare the effects of market volatilities on Salesforce and Franklin Floating 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 Franklin Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Franklin Floating.
Diversification Opportunities for Salesforce and Franklin Floating
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Franklin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate 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 Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of Salesforce i.e., Salesforce and Franklin Floating go up and down completely randomly.
Pair Corralation between Salesforce and Franklin Floating
Considering the 90-day investment horizon Salesforce is expected to generate 9.6 times more return on investment than Franklin Floating. However, Salesforce is 9.6 times more volatile than Franklin Floating Rate. It trades about 0.12 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about 0.16 per unit of risk. If you would invest 29,013 in Salesforce on October 25, 2024 and sell it today you would earn a total of 4,453 from holding Salesforce or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Salesforce vs. Franklin Floating Rate
Performance |
| Timeline |
| Salesforce |
| Franklin Floating Rate |
Salesforce and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Franklin Floating
The main advantage of trading using opposite Salesforce and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Franklin Floating 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 Franklin Floating will offset losses from the drop in Franklin Floating's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Franklin Floating vs. Pimco Moditiesplus Strategy | Franklin Floating vs. Transamerica Emerging Markets | Franklin Floating vs. Jpmorgan Emerging Markets | Franklin Floating vs. Wasatch Frontier Emerging |
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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