Correlation Between Salesforce and Fidelity National

Can any of the company-specific risk be diversified away by investing in both Salesforce and Fidelity National 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 Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between salesforce inc and Fidelity National Information, you can compare the effects of market volatilities on Salesforce and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Fidelity National.

Diversification Opportunities for Salesforce and Fidelity National

0.66

Correlation Coefficient

Salesforce  Fidelity National

Poor diversification

The 3 months correlation between Salesforce and Fidelity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding salesforce inc and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 inc are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Salesforce i.e., Salesforce and Fidelity National go up and down completely randomly.

Pair Corralation between Salesforce and Fidelity National

Assuming the 90 days trading horizon salesforce inc is expected to generate 1.81 times more return on investment than Fidelity National. However, Salesforce is 1.81 times more volatile than Fidelity National Information. It trades about 0.29 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.11 per unit of risk. If you would invest  6,381  in salesforce inc on September 17, 2024 and sell it today you would earn a total of  3,281  from holding salesforce inc or generate 51.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

salesforce inc  vs.  Fidelity National Information

salesforce inc

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in salesforce inc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Salesforce sustained solid returns over the last few months and may actually be approaching a breakup point.

Fidelity National

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fidelity National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Salesforce and Fidelity National

The main advantage of trading using opposite Salesforce and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.

The idea behind salesforce inc and Fidelity National Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.