Correlation Between Salesforce and MetLife Preferred
Can any of the company-specific risk be diversified away by investing in both Salesforce and MetLife Preferred 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 MetLife Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and MetLife Preferred Stock, you can compare the effects of market volatilities on Salesforce and MetLife Preferred 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 MetLife Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and MetLife Preferred.
Diversification Opportunities for Salesforce and MetLife Preferred
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and MetLife is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and MetLife Preferred Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife Preferred Stock 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 MetLife Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife Preferred Stock has no effect on the direction of Salesforce i.e., Salesforce and MetLife Preferred go up and down completely randomly.
Pair Corralation between Salesforce and MetLife Preferred
Considering the 90-day investment horizon Salesforce is expected to generate 2.94 times more return on investment than MetLife Preferred. However, Salesforce is 2.94 times more volatile than MetLife Preferred Stock. It trades about 0.08 of its potential returns per unit of risk. MetLife Preferred Stock is currently generating about 0.06 per unit of risk. If you would invest 19,562 in Salesforce on August 24, 2024 and sell it today you would earn a total of 14,640 from holding Salesforce or generate 74.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. MetLife Preferred Stock
Performance |
| Timeline |
| Salesforce |
| MetLife Preferred Stock |
Salesforce and MetLife Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and MetLife Preferred
The main advantage of trading using opposite Salesforce and MetLife Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, MetLife Preferred 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 MetLife Preferred will offset losses from the drop in MetLife Preferred's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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