Correlation Between Fastly and Salesforce

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

By analyzing existing cross correlation between Fastly Inc and Salesforce, you can compare the effects of market volatilities on Fastly and Salesforce 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 Fastly with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastly and Salesforce.

Diversification Opportunities for Fastly and Salesforce

0.63

Correlation Coefficient

Fastly  Salesforce

Poor diversification

The 3 months correlation between Fastly and Salesforce is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fastly Inc and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Fastly 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 Fastly Inc are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Fastly i.e., Fastly and Salesforce go up and down completely randomly.

Pair Corralation between Fastly and Salesforce

If you would invest  1,561  in Fastly Inc on March 18, 2024 and sell it today you would earn a total of  0.00  from holding Fastly Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.96%
Values	Daily Returns

Fastly Inc  vs.  Salesforce

Fastly Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fastly Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fastly is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Salesforce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fastly and Salesforce

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

The idea behind Fastly Inc and Salesforce 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.