Correlation Between SWISS WATER and Salesforce
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Salesforce, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Salesforce.
Diversification Opportunities for SWISS WATER and Salesforce
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SWISS and Salesforce is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Salesforce go up and down completely randomly.
Pair Corralation between SWISS WATER and Salesforce
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the Salesforce. In addition to that, SWISS WATER is 2.9 times more volatile than Salesforce. It trades about -0.15 of its total potential returns per unit of risk. Salesforce is currently generating about -0.32 per unit of volatility. If you would invest 34,594 in Salesforce on October 7, 2024 and sell it today you would lose (2,354) from holding Salesforce or give up 6.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Salesforce
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Salesforce |
SWISS WATER and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Salesforce
The main advantage of trading using opposite SWISS WATER and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. Corsair Gaming | SWISS WATER vs. Sumitomo Rubber Industries | SWISS WATER vs. PT Wintermar Offshore | SWISS WATER vs. Goodyear Tire Rubber |
| Salesforce vs. Rocket Internet SE | Salesforce vs. Superior Plus Corp | Salesforce vs. NMI Holdings | Salesforce vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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