Correlation Between Salesforce and MBank SA
Can any of the company-specific risk be diversified away by investing in both Salesforce and MBank SA 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 MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PZ Cormay SA and mBank SA, you can compare the effects of market volatilities on Salesforce and MBank SA 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 MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and MBank SA.
Diversification Opportunities for Salesforce and MBank SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and MBank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PZ Cormay SA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA 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 PZ Cormay SA are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Salesforce i.e., Salesforce and MBank SA go up and down completely randomly.
Pair Corralation between Salesforce and MBank SA
Assuming the 90 days trading horizon PZ Cormay SA is expected to under-perform the MBank SA. But the stock apears to be less risky and, when comparing its historical volatility, PZ Cormay SA is 1.07 times less risky than MBank SA. The stock trades about -0.11 of its potential returns per unit of risk. The mBank SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 63,600 in mBank SA on September 1, 2024 and sell it today you would lose (10,600) from holding mBank SA or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PZ Cormay SA vs. mBank SA
Performance |
| Timeline |
| PZ Cormay SA |
| mBank SA |
Salesforce and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and MBank SA
The main advantage of trading using opposite Salesforce and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, MBank SA 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 MBank SA will offset losses from the drop in MBank SA's long position.| Salesforce vs. Banco Santander SA | Salesforce vs. UniCredit SpA | Salesforce vs. CEZ as | Salesforce vs. Polski Koncern Naftowy |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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