Correlation Between Bread Financial and Salesforce
Can any of the company-specific risk be diversified away by investing in both Bread Financial 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 Bread Financial and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and salesforce inc, you can compare the effects of market volatilities on Bread Financial 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 Bread Financial with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and Salesforce.
Diversification Opportunities for Bread Financial and Salesforce
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bread and Salesforce is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc and Bread Financial 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 Bread Financial Holdings 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 inc has no effect on the direction of Bread Financial i.e., Bread Financial and Salesforce go up and down completely randomly.
Pair Corralation between Bread Financial and Salesforce
Assuming the 90 days trading horizon Bread Financial is expected to generate 1.31 times less return on investment than Salesforce. In addition to that, Bread Financial is 1.58 times more volatile than salesforce inc. It trades about 0.05 of its total potential returns per unit of risk. salesforce inc is currently generating about 0.11 per unit of volatility. If you would invest 3,271 in salesforce inc on September 3, 2024 and sell it today you would earn a total of 5,756 from holding salesforce inc or generate 175.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.6% |
| Values | Daily Returns |
Bread Financial Holdings vs. salesforce inc
Performance |
| Timeline |
| Bread Financial Holdings |
| salesforce inc |
Bread Financial and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and Salesforce
The main advantage of trading using opposite Bread Financial and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial 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.| Bread Financial vs. Visa Inc | Bread Financial vs. Capital One Financial | Bread Financial vs. Credit Acceptance |
| Salesforce vs. Hospital Mater Dei | Salesforce vs. Bread Financial Holdings | Salesforce vs. Costco Wholesale | Salesforce vs. HDFC Bank Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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