Correlation Between Salesforce and Fuji Media
Can any of the company-specific risk be diversified away by investing in both Salesforce and Fuji Media 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 Fuji Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Fuji Media Holdings, you can compare the effects of market volatilities on Salesforce and Fuji Media 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 Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Fuji Media.
Diversification Opportunities for Salesforce and Fuji Media
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Fuji is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings 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 Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of Salesforce i.e., Salesforce and Fuji Media go up and down completely randomly.
Pair Corralation between Salesforce and Fuji Media
Assuming the 90 days trading horizon Salesforce is expected to generate 1.53 times more return on investment than Fuji Media. However, Salesforce is 1.53 times more volatile than Fuji Media Holdings. It trades about 0.27 of its potential returns per unit of risk. Fuji Media Holdings is currently generating about 0.11 per unit of risk. If you would invest 27,040 in Salesforce on September 4, 2024 and sell it today you would earn a total of 4,630 from holding Salesforce or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Fuji Media Holdings
Performance |
| Timeline |
| Salesforce |
| Fuji Media Holdings |
Salesforce and Fuji Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Fuji Media
The main advantage of trading using opposite Salesforce and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Fuji Media 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 Fuji Media will offset losses from the drop in Fuji Media's long position.| Salesforce vs. Rocket Internet SE | Salesforce vs. Superior Plus Corp | Salesforce vs. NMI Holdings | Salesforce vs. Origin Agritech |
| Fuji Media vs. Salesforce | Fuji Media vs. CPU SOFTWAREHOUSE | Fuji Media vs. Unity Software | Fuji Media vs. PSI Software AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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