Correlation Between Salesforce and FG Annuities
Can any of the company-specific risk be diversified away by investing in both Salesforce and FG Annuities 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 FG Annuities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and FG Annuities Life, you can compare the effects of market volatilities on Salesforce and FG Annuities 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 FG Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and FG Annuities.
Diversification Opportunities for Salesforce and FG Annuities
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and FG Annuities is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life 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 FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of Salesforce i.e., Salesforce and FG Annuities go up and down completely randomly.
Pair Corralation between Salesforce and FG Annuities
Considering the 90-day investment horizon Salesforce is expected to generate 0.82 times more return on investment than FG Annuities. However, Salesforce is 1.22 times less risky than FG Annuities. It trades about 0.05 of its potential returns per unit of risk. FG Annuities Life is currently generating about 0.03 per unit of risk. If you would invest 27,985 in Salesforce on August 28, 2024 and sell it today you would earn a total of 5,926 from holding Salesforce or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. FG Annuities Life
Performance |
| Timeline |
| Salesforce |
| FG Annuities Life |
Salesforce and FG Annuities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and FG Annuities
The main advantage of trading using opposite Salesforce and FG Annuities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, FG Annuities 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 FG Annuities will offset losses from the drop in FG Annuities' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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