Correlation Between Salesforce and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Salesforce and Jeju Bank 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 Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Jeju Bank, you can compare the effects of market volatilities on Salesforce and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Jeju Bank.
Diversification Opportunities for Salesforce and Jeju Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Jeju is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Salesforce i.e., Salesforce and Jeju Bank go up and down completely randomly.
Pair Corralation between Salesforce and Jeju Bank
Considering the 90-day investment horizon Salesforce is expected to under-perform the Jeju Bank. In addition to that, Salesforce is 3.18 times more volatile than Jeju Bank. It trades about -0.31 of its total potential returns per unit of risk. Jeju Bank is currently generating about 0.42 per unit of volatility. If you would invest 795,000 in Jeju Bank on November 27, 2024 and sell it today you would earn a total of 34,000 from holding Jeju Bank or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Salesforce vs. Jeju Bank
Performance |
| Timeline |
| Salesforce |
| Jeju Bank |
Salesforce and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Jeju Bank
The main advantage of trading using opposite Salesforce and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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