Correlation Between Salesforce and FNB Corp
Can any of the company-specific risk be diversified away by investing in both Salesforce and FNB Corp 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 FNB Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and FNB Corp, you can compare the effects of market volatilities on Salesforce and FNB Corp 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 FNB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and FNB Corp.
Diversification Opportunities for Salesforce and FNB Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and FNB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and FNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Corp 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 FNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Corp has no effect on the direction of Salesforce i.e., Salesforce and FNB Corp go up and down completely randomly.
Pair Corralation between Salesforce and FNB Corp
Considering the 90-day investment horizon Salesforce is expected to generate 1.11 times more return on investment than FNB Corp. However, Salesforce is 1.11 times more volatile than FNB Corp. It trades about 0.07 of its potential returns per unit of risk. FNB Corp is currently generating about 0.07 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. FNB Corp
Performance |
| Timeline |
| Salesforce |
| FNB Corp |
Salesforce and FNB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and FNB Corp
The main advantage of trading using opposite Salesforce and FNB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, FNB Corp 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 FNB Corp will offset losses from the drop in FNB Corp's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| FNB Corp vs. ST Bancorp | FNB Corp vs. CrossFirst Bankshares | FNB Corp vs. Enterprise Financial Services | FNB Corp vs. The First Bancshares, |
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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