Correlation Between Salesforce and Thales
Can any of the company-specific risk be diversified away by investing in both Salesforce and Thales 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 Thales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Thales, you can compare the effects of market volatilities on Salesforce and Thales 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 Thales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Thales.
Diversification Opportunities for Salesforce and Thales
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and Thales is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Thales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales 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 Thales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales has no effect on the direction of Salesforce i.e., Salesforce and Thales go up and down completely randomly.
Pair Corralation between Salesforce and Thales
Considering the 90-day investment horizon Salesforce is expected to generate 1.1 times more return on investment than Thales. However, Salesforce is 1.1 times more volatile than Thales. It trades about 0.17 of its potential returns per unit of risk. Thales is currently generating about -0.07 per unit of risk. If you would invest 23,413 in Salesforce on September 2, 2024 and sell it today you would earn a total of 9,586 from holding Salesforce or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Salesforce vs. Thales
Performance |
| Timeline |
| Salesforce |
| Thales |
Salesforce and Thales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Thales
The main advantage of trading using opposite Salesforce and Thales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Thales 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 Thales will offset losses from the drop in Thales' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Thales vs. Cizzle Biotechnology Holdings | Thales vs. Fevertree Drinks Plc | Thales vs. JLEN Environmental Assets | Thales vs. Batm Advanced 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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