Correlation Between Salesforce and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Salesforce and Host Hotels 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 Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Host Hotels Resorts, you can compare the effects of market volatilities on Salesforce and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Host Hotels.
Diversification Opportunities for Salesforce and Host Hotels
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Host is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Salesforce i.e., Salesforce and Host Hotels go up and down completely randomly.
Pair Corralation between Salesforce and Host Hotels
Considering the 90-day investment horizon Salesforce is expected to generate 1.14 times more return on investment than Host Hotels. However, Salesforce is 1.14 times more volatile than Host Hotels Resorts. It trades about 0.16 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 23,588 in Salesforce on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Salesforce or generate 39.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Salesforce vs. Host Hotels Resorts
Performance |
| Timeline |
| Salesforce |
| Host Hotels Resorts |
Salesforce and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Host Hotels
The main advantage of trading using opposite Salesforce and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Host Hotels vs. Greenroc Mining PLC | Host Hotels vs. Panther Metals PLC | Host Hotels vs. X FAB Silicon Foundries | Host Hotels vs. Endeavour Mining Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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