Correlation Between Salesforce and Pepco Group
Can any of the company-specific risk be diversified away by investing in both Salesforce and Pepco Group 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 Pepco Group 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 Pepco Group BV, you can compare the effects of market volatilities on Salesforce and Pepco Group 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 Pepco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Pepco Group.
Diversification Opportunities for Salesforce and Pepco Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Pepco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PZ Cormay SA and Pepco Group BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepco Group BV 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 Pepco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepco Group BV has no effect on the direction of Salesforce i.e., Salesforce and Pepco Group go up and down completely randomly.
Pair Corralation between Salesforce and Pepco Group
Assuming the 90 days trading horizon PZ Cormay SA is expected to generate 2.81 times more return on investment than Pepco Group. However, Salesforce is 2.81 times more volatile than Pepco Group BV. It trades about 0.13 of its potential returns per unit of risk. Pepco Group BV is currently generating about -0.15 per unit of risk. If you would invest 39.00 in PZ Cormay SA on October 25, 2024 and sell it today you would earn a total of 5.00 from holding PZ Cormay SA or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PZ Cormay SA vs. Pepco Group BV
Performance |
| Timeline |
| PZ Cormay SA |
| Pepco Group BV |
Salesforce and Pepco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Pepco Group
The main advantage of trading using opposite Salesforce and Pepco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Pepco Group 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 Pepco Group will offset losses from the drop in Pepco Group's long position.| Salesforce vs. New Tech Venture | Salesforce vs. PLAYWAY SA | Salesforce vs. Monnari Trade SA | Salesforce vs. Mercator Medical SA |
| Pepco Group vs. New Tech Venture | Pepco Group vs. LSI Software SA | Pepco Group vs. SOFTWARE MANSION SPOLKA | Pepco Group vs. Marie Brizard Wine |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |