Correlation Between Salesforce and First Eagle
Can any of the company-specific risk be diversified away by investing in both Salesforce and First Eagle 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 First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and First Eagle Fund, you can compare the effects of market volatilities on Salesforce and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and First Eagle.
Diversification Opportunities for Salesforce and First Eagle
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Fund has no effect on the direction of Salesforce i.e., Salesforce and First Eagle go up and down completely randomly.
Pair Corralation between Salesforce and First Eagle
Considering the 90-day investment horizon Salesforce is expected to generate 2.95 times more return on investment than First Eagle. However, Salesforce is 2.95 times more volatile than First Eagle Fund. It trades about 0.2 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.18 per unit of risk. If you would invest 21,733 in Salesforce on August 28, 2024 and sell it today you would earn a total of 12,178 from holding Salesforce or generate 56.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. First Eagle Fund
Performance |
| Timeline |
| Salesforce |
| First Eagle Fund |
Salesforce and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and First Eagle
The main advantage of trading using opposite Salesforce and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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