Correlation Between Salesforce and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Salesforce and Canaf Investments 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 Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalesforceCom CDR and Canaf Investments, you can compare the effects of market volatilities on Salesforce and Canaf Investments 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 Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Canaf Investments.
Diversification Opportunities for Salesforce and Canaf Investments
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Canaf is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SalesforceCom CDR and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments 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 SalesforceCom CDR are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Salesforce i.e., Salesforce and Canaf Investments go up and down completely randomly.
Pair Corralation between Salesforce and Canaf Investments
Assuming the 90 days trading horizon Salesforce is expected to generate 1.95 times less return on investment than Canaf Investments. But when comparing it to its historical volatility, SalesforceCom CDR is 1.7 times less risky than Canaf Investments. It trades about 0.07 of its potential returns per unit of risk. Canaf Investments is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Canaf Investments on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Canaf Investments or generate 107.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalesforceCom CDR vs. Canaf Investments
Performance |
| Timeline |
| SalesforceCom CDR |
| Canaf Investments |
Salesforce and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Canaf Investments
The main advantage of trading using opposite Salesforce and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Salesforce vs. Apple Inc CDR | Salesforce vs. NVIDIA CDR | Salesforce vs. Microsoft Corp CDR | Salesforce vs. Amazon CDR |
| Canaf Investments vs. Ressources Minieres Radisson | Canaf Investments vs. Galantas Gold Corp | Canaf Investments vs. Red Pine Exploration | Canaf Investments vs. Kore Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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