Correlation Between Salesforce and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both Salesforce and Keyang Electric 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 Keyang Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Keyang Electric Machinery, you can compare the effects of market volatilities on Salesforce and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Keyang Electric.
Diversification Opportunities for Salesforce and Keyang Electric
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Keyang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of Salesforce i.e., Salesforce and Keyang Electric go up and down completely randomly.
Pair Corralation between Salesforce and Keyang Electric
Considering the 90-day investment horizon Salesforce is expected to generate 0.87 times more return on investment than Keyang Electric. However, Salesforce is 1.16 times less risky than Keyang Electric. It trades about 0.08 of its potential returns per unit of risk. Keyang Electric Machinery is currently generating about -0.03 per unit of risk. If you would invest 16,718 in Salesforce on November 7, 2024 and sell it today you would earn a total of 17,696 from holding Salesforce or generate 105.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.96% |
| Values | Daily Returns |
Salesforce vs. Keyang Electric Machinery
Performance |
| Timeline |
| Salesforce |
| Keyang Electric Machinery |
Salesforce and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Keyang Electric
The main advantage of trading using opposite Salesforce and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Keyang Electric vs. Nable Communications | Keyang Electric vs. Lotte Non Life Insurance | Keyang Electric vs. LG Display Co | Keyang Electric vs. Daishin Information Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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