Correlation Between Salesforce and Bill Holdings
Can any of the company-specific risk be diversified away by investing in both Salesforce and Bill Holdings 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 Bill Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Bill Holdings, you can compare the effects of market volatilities on Salesforce and Bill Holdings 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 Bill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Bill Holdings.
Diversification Opportunities for Salesforce and Bill Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Bill is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Bill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Holdings 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 Bill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Holdings has no effect on the direction of Salesforce i.e., Salesforce and Bill Holdings go up and down completely randomly.
Pair Corralation between Salesforce and Bill Holdings
Considering the 90-day investment horizon Salesforce is expected to generate 0.53 times more return on investment than Bill Holdings. However, Salesforce is 1.9 times less risky than Bill Holdings. It trades about 0.07 of its potential returns per unit of risk. Bill Holdings is currently generating about 0.0 per unit of risk. If you would invest 21,275 in Salesforce on September 2, 2024 and sell it today you would earn a total of 11,724 from holding Salesforce or generate 55.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.89% |
| Values | Daily Returns |
Salesforce vs. Bill Holdings
Performance |
| Timeline |
| Salesforce |
| Bill Holdings |
Salesforce and Bill Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Bill Holdings
The main advantage of trading using opposite Salesforce and Bill Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Bill Holdings 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 Bill Holdings will offset losses from the drop in Bill Holdings' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Bill Holdings vs. Aluminum of | Bill Holdings vs. EHEALTH | Bill Holdings vs. Bausch Health Companies | Bill Holdings vs. YOOMA WELLNESS INC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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