Correlation Between Check Point and Salesforce
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Salesforce, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Salesforce.
Diversification Opportunities for Check Point and Salesforce
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Check and Salesforce is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Salesforce go up and down completely randomly.
Pair Corralation between Check Point and Salesforce
Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Check Point Software is 1.07 times less risky than Salesforce. The stock trades about -0.04 of its potential returns per unit of risk. The Salesforce is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 26,550 in Salesforce on September 13, 2024 and sell it today you would earn a total of 7,495 from holding Salesforce or generate 28.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Salesforce
Performance |
| Timeline |
| Check Point Software |
| Salesforce |
Check Point and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Salesforce
The main advantage of trading using opposite Check Point and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc | Check Point vs. Apple Inc |
| Salesforce vs. Superior Plus Corp | Salesforce vs. SIVERS SEMICONDUCTORS AB | Salesforce vs. Norsk Hydro ASA | Salesforce vs. Reliance Steel Aluminum |
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 CEOs Directory module to screen CEOs from public companies around the world.
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