Correlation Between Salesforce and New Found
Can any of the company-specific risk be diversified away by investing in both Salesforce and New Found 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 New Found into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalesforceCom CDR and New Found Gold, you can compare the effects of market volatilities on Salesforce and New Found 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 New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and New Found.
Diversification Opportunities for Salesforce and New Found
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and New is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding SalesforceCom CDR and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found Gold 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 New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of Salesforce i.e., Salesforce and New Found go up and down completely randomly.
Pair Corralation between Salesforce and New Found
Assuming the 90 days trading horizon SalesforceCom CDR is expected to generate 0.48 times more return on investment than New Found. However, SalesforceCom CDR is 2.1 times less risky than New Found. It trades about 0.23 of its potential returns per unit of risk. New Found Gold is currently generating about -0.18 per unit of risk. If you would invest 2,373 in SalesforceCom CDR on September 4, 2024 and sell it today you would earn a total of 270.00 from holding SalesforceCom CDR or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalesforceCom CDR vs. New Found Gold
Performance |
| Timeline |
| SalesforceCom CDR |
| New Found Gold |
Salesforce and New Found Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and New Found
The main advantage of trading using opposite Salesforce and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, New Found 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 New Found will offset losses from the drop in New Found's long position.| Salesforce vs. Highwood Asset Management | Salesforce vs. Partners Value Investments | Salesforce vs. Gamehost | Salesforce vs. Bip Investment Corp |
| New Found vs. Quipt Home Medical | New Found vs. UnitedHealth Group CDR | New Found vs. Converge Technology Solutions | New Found vs. NorthWest Healthcare Properties |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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