Correlation Between Salesforce and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both Salesforce and Kumho Ind 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 Kumho Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Kumho Ind, you can compare the effects of market volatilities on Salesforce and Kumho Ind 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 Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Kumho Ind.
Diversification Opportunities for Salesforce and Kumho Ind
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Kumho is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind 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 Salesforce are associated (or correlated) with Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of Salesforce i.e., Salesforce and Kumho Ind go up and down completely randomly.
Pair Corralation between Salesforce and Kumho Ind
Considering the 90-day investment horizon Salesforce is expected to generate 0.94 times more return on investment than Kumho Ind. However, Salesforce is 1.06 times less risky than Kumho Ind. It trades about 0.1 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.07 per unit of risk. If you would invest 13,252 in Salesforce on September 2, 2024 and sell it today you would earn a total of 19,747 from holding Salesforce or generate 149.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Salesforce vs. Kumho Ind
Performance |
| Timeline |
| Salesforce |
| Kumho Ind |
Salesforce and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Kumho Ind
The main advantage of trading using opposite Salesforce and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Kumho Ind vs. Korea New Network | Kumho Ind vs. ICD Co | Kumho Ind vs. DYPNF CoLtd | Kumho Ind vs. Busan Industrial Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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