Correlation Between Salesforce and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both Salesforce and Fidelity Covington 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 Fidelity Covington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Fidelity Covington Trust, you can compare the effects of market volatilities on Salesforce and Fidelity Covington 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 Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Fidelity Covington.
Diversification Opportunities for Salesforce and Fidelity Covington
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Salesforce and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust 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 Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of Salesforce i.e., Salesforce and Fidelity Covington go up and down completely randomly.
Pair Corralation between Salesforce and Fidelity Covington
Considering the 90-day investment horizon Salesforce is expected to generate 1.75 times more return on investment than Fidelity Covington. However, Salesforce is 1.75 times more volatile than Fidelity Covington Trust. It trades about 0.38 of its potential returns per unit of risk. Fidelity Covington Trust is currently generating about 0.1 per unit of risk. If you would invest 29,046 in Salesforce on August 26, 2024 and sell it today you would earn a total of 5,156 from holding Salesforce or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Fidelity Covington Trust
Performance |
| Timeline |
| Salesforce |
| Fidelity Covington Trust |
Salesforce and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Fidelity Covington
The main advantage of trading using opposite Salesforce and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Fidelity Covington 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 Fidelity Covington will offset losses from the drop in Fidelity Covington's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Fidelity Covington vs. FT Vest Equity | Fidelity Covington vs. Northern Lights | Fidelity Covington vs. Dimensional International High | Fidelity Covington vs. First Trust Exchange Traded |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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