Correlation Between Salesforce and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Salesforce and Korea Steel 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 Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Korea Steel Co, you can compare the effects of market volatilities on Salesforce and Korea Steel 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 Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Korea Steel.
Diversification Opportunities for Salesforce and Korea Steel
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Korea is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel 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 Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Salesforce i.e., Salesforce and Korea Steel go up and down completely randomly.
Pair Corralation between Salesforce and Korea Steel
Considering the 90-day investment horizon Salesforce is expected to generate 1.34 times more return on investment than Korea Steel. However, Salesforce is 1.34 times more volatile than Korea Steel Co. It trades about 0.28 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.25 per unit of risk. If you would invest 29,137 in Salesforce on September 1, 2024 and sell it today you would earn a total of 3,862 from holding Salesforce or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Korea Steel Co
Performance |
| Timeline |
| Salesforce |
| Korea Steel |
Salesforce and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Korea Steel
The main advantage of trading using opposite Salesforce and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Korea Steel 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Korea Steel vs. PJ Electronics Co | Korea Steel vs. Kukil Metal Co | Korea Steel vs. Dongwon Metal Co | Korea Steel vs. Heungkuk Metaltech CoLtd |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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