Correlation Between Salesforce and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Salesforce and Firan Technology 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 Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Firan Technology Group, you can compare the effects of market volatilities on Salesforce and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Firan Technology.
Diversification Opportunities for Salesforce and Firan Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Firan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Salesforce i.e., Salesforce and Firan Technology go up and down completely randomly.
Pair Corralation between Salesforce and Firan Technology
Considering the 90-day investment horizon Salesforce is expected to generate 1.02 times less return on investment than Firan Technology. But when comparing it to its historical volatility, Salesforce is 1.15 times less risky than Firan Technology. It trades about 0.16 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Firan Technology Group on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Firan Technology Group or generate 39.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Firan Technology Group
Performance |
| Timeline |
| Salesforce |
| Firan Technology |
Salesforce and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Firan Technology
The main advantage of trading using opposite Salesforce and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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