Correlation Between Salesforce and Lien Chang
Can any of the company-specific risk be diversified away by investing in both Salesforce and Lien Chang 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 Lien Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Lien Chang Electronic, you can compare the effects of market volatilities on Salesforce and Lien Chang 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 Lien Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Lien Chang.
Diversification Opportunities for Salesforce and Lien Chang
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Lien is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Lien Chang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Chang Electronic 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 Lien Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Chang Electronic has no effect on the direction of Salesforce i.e., Salesforce and Lien Chang go up and down completely randomly.
Pair Corralation between Salesforce and Lien Chang
Considering the 90-day investment horizon Salesforce is expected to generate 0.54 times more return on investment than Lien Chang. However, Salesforce is 1.85 times less risky than Lien Chang. It trades about 0.25 of its potential returns per unit of risk. Lien Chang Electronic is currently generating about -0.16 per unit of risk. If you would invest 29,472 in Salesforce on September 2, 2024 and sell it today you would earn a total of 3,527 from holding Salesforce or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Lien Chang Electronic
Performance |
| Timeline |
| Salesforce |
| Lien Chang Electronic |
Salesforce and Lien Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Lien Chang
The main advantage of trading using opposite Salesforce and Lien Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Lien Chang 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 Lien Chang will offset losses from the drop in Lien Chang's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Lien Chang vs. Hitron Technologies | Lien Chang vs. Universal Microelectronics Co | Lien Chang vs. Pan International Industrial Corp | Lien Chang vs. Sunonwealth Electric Machine |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |