Correlation Between Salesforce and Hershey
Can any of the company-specific risk be diversified away by investing in both Salesforce and Hershey 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 Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Hershey Co, you can compare the effects of market volatilities on Salesforce and Hershey 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 Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Hershey.
Diversification Opportunities for Salesforce and Hershey
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Hershey is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey 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 Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Salesforce i.e., Salesforce and Hershey go up and down completely randomly.
Pair Corralation between Salesforce and Hershey
Considering the 90-day investment horizon Salesforce is expected to generate 1.49 times more return on investment than Hershey. However, Salesforce is 1.49 times more volatile than Hershey Co. It trades about 0.08 of its potential returns per unit of risk. Hershey Co is currently generating about -0.06 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 | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Salesforce vs. Hershey Co
Performance |
| Timeline |
| Salesforce |
| Hershey |
Salesforce and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Hershey
The main advantage of trading using opposite Salesforce and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Hershey vs. Public Storage | Hershey vs. Telecom Italia SpA | Hershey vs. Spirent Communications plc | Hershey vs. Aeorema Communications Plc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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