Correlation Between Salesforce and Farmers
Can any of the company-specific risk be diversified away by investing in both Salesforce and Farmers 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 Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Farmers And Merchants, you can compare the effects of market volatilities on Salesforce and Farmers 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 Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Farmers.
Diversification Opportunities for Salesforce and Farmers
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Salesforce and Farmers is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants 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 Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of Salesforce i.e., Salesforce and Farmers go up and down completely randomly.
Pair Corralation between Salesforce and Farmers
Considering the 90-day investment horizon Salesforce is expected to generate 1.38 times more return on investment than Farmers. However, Salesforce is 1.38 times more volatile than Farmers And Merchants. It trades about 0.07 of its potential returns per unit of risk. Farmers And Merchants is currently generating about 0.03 per unit of risk. If you would invest 20,860 in Salesforce on August 31, 2024 and sell it today you would earn a total of 12,139 from holding Salesforce or generate 58.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.4% |
| Values | Daily Returns |
Salesforce vs. Farmers And Merchants
Performance |
| Timeline |
| Salesforce |
| Farmers And Merchants |
Salesforce and Farmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Farmers
The main advantage of trading using opposite Salesforce and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Farmers 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 Farmers will offset losses from the drop in Farmers' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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