Correlation Between Salesforce and Open Text
Can any of the company-specific risk be diversified away by investing in both Salesforce and Open Text 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 Open Text into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalesforceCom CDR and Open Text Corp, you can compare the effects of market volatilities on Salesforce and Open Text 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 Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Open Text.
Diversification Opportunities for Salesforce and Open Text
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Open is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SalesforceCom CDR and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp 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 Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Salesforce i.e., Salesforce and Open Text go up and down completely randomly.
Pair Corralation between Salesforce and Open Text
Assuming the 90 days trading horizon SalesforceCom CDR is expected to generate 0.69 times more return on investment than Open Text. However, SalesforceCom CDR is 1.44 times less risky than Open Text. It trades about 0.37 of its potential returns per unit of risk. Open Text Corp is currently generating about -0.15 per unit of risk. If you would invest 2,269 in SalesforceCom CDR on August 24, 2024 and sell it today you would earn a total of 409.00 from holding SalesforceCom CDR or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalesforceCom CDR vs. Open Text Corp
Performance |
| Timeline |
| SalesforceCom CDR |
| Open Text Corp |
Salesforce and Open Text Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Open Text
The main advantage of trading using opposite Salesforce and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text's long position.| Salesforce vs. Forstrong Global Income | Salesforce vs. Terreno Resources Corp | Salesforce vs. iShares Canadian HYBrid | Salesforce vs. Brompton European Dividend |
| Open Text vs. High Liner Foods | Open Text vs. SalesforceCom CDR | Open Text vs. Hemisphere Energy | Open Text vs. Verizon Communications CDR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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