Correlation Between Salesforce and First Mining
Can any of the company-specific risk be diversified away by investing in both Salesforce and First Mining 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 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and First Mining Gold, you can compare the effects of market volatilities on Salesforce and First Mining 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 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and First Mining.
Diversification Opportunities for Salesforce and First Mining
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and First is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold 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 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Salesforce i.e., Salesforce and First Mining go up and down completely randomly.
Pair Corralation between Salesforce and First Mining
Considering the 90-day investment horizon Salesforce is expected to generate 0.5 times more return on investment than First Mining. However, Salesforce is 2.01 times less risky than First Mining. It trades about 0.25 of its potential returns per unit of risk. First Mining Gold is currently generating about -0.04 per unit of risk. If you would invest 29,472 in Salesforce on September 2, 2024 and sell it today you would earn a total of 3,527 from holding Salesforce or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. First Mining Gold
Performance |
| Timeline |
| Salesforce |
| First Mining Gold |
Salesforce and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and First Mining
The main advantage of trading using opposite Salesforce and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, First Mining 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 Mining will offset losses from the drop in First Mining's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| First Mining vs. South32 Limited | First Mining vs. NioCorp Developments Ltd | First Mining vs. HUMANA INC | First Mining vs. SCOR PK |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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