Correlation Between Salesforce and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Salesforce and FGI Industries 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 FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and FGI Industries, you can compare the effects of market volatilities on Salesforce and FGI Industries 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 FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and FGI Industries.
Diversification Opportunities for Salesforce and FGI Industries
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and FGI is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries 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 FGI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGI Industries has no effect on the direction of Salesforce i.e., Salesforce and FGI Industries go up and down completely randomly.
Pair Corralation between Salesforce and FGI Industries
Considering the 90-day investment horizon Salesforce is expected to generate 0.36 times more return on investment than FGI Industries. However, Salesforce is 2.8 times less risky than FGI Industries. It trades about 0.23 of its potential returns per unit of risk. FGI Industries is currently generating about -0.16 per unit of risk. If you would invest 29,640 in Salesforce on August 31, 2024 and sell it today you would earn a total of 3,361 from holding Salesforce or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. FGI Industries
Performance |
| Timeline |
| Salesforce |
| FGI Industries |
Salesforce and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and FGI Industries
The main advantage of trading using opposite Salesforce and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, FGI Industries 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 FGI Industries will offset losses from the drop in FGI Industries' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| FGI Industries vs. Fundamental Global | FGI Industries vs. Yoshitsu Co Ltd | FGI Industries vs. Hour Loop | FGI Industries vs. Direct Digital Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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