Correlation Between Salesforce and Yixin Group
Can any of the company-specific risk be diversified away by investing in both Salesforce and Yixin Group 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 Yixin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Yixin Group Limited, you can compare the effects of market volatilities on Salesforce and Yixin Group 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 Yixin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Yixin Group.
Diversification Opportunities for Salesforce and Yixin Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Salesforce and Yixin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Yixin Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yixin Group Limited 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 Yixin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yixin Group Limited has no effect on the direction of Salesforce i.e., Salesforce and Yixin Group go up and down completely randomly.
Pair Corralation between Salesforce and Yixin Group
Considering the 90-day investment horizon Salesforce is expected to generate 1.55 times less return on investment than Yixin Group. But when comparing it to its historical volatility, Salesforce is 3.47 times less risky than Yixin Group. It trades about 0.1 of its potential returns per unit of risk. Yixin Group Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4.81 in Yixin Group Limited on September 3, 2024 and sell it today you would earn a total of 2.69 from holding Yixin Group Limited or generate 55.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Salesforce vs. Yixin Group Limited
Performance |
| Timeline |
| Salesforce |
| Yixin Group Limited |
Salesforce and Yixin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Yixin Group
The main advantage of trading using opposite Salesforce and Yixin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Yixin Group 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 Yixin Group will offset losses from the drop in Yixin Group's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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