Correlation Between Salesforce and Kings Town
Can any of the company-specific risk be diversified away by investing in both Salesforce and Kings Town 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 Kings Town into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Kings Town Bank, you can compare the effects of market volatilities on Salesforce and Kings Town 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 Kings Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Kings Town.
Diversification Opportunities for Salesforce and Kings Town
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Kings is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Kings Town Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kings Town Bank 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 Kings Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kings Town Bank has no effect on the direction of Salesforce i.e., Salesforce and Kings Town go up and down completely randomly.
Pair Corralation between Salesforce and Kings Town
Considering the 90-day investment horizon Salesforce is expected to generate 1.39 times more return on investment than Kings Town. However, Salesforce is 1.39 times more volatile than Kings Town Bank. It trades about 0.28 of its potential returns per unit of risk. Kings Town Bank is currently generating about -0.05 per unit of risk. If you would invest 29,137 in Salesforce on September 1, 2024 and sell it today you would earn a total of 3,862 from holding Salesforce or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Kings Town Bank
Performance |
| Timeline |
| Salesforce |
| Kings Town Bank |
Salesforce and Kings Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Kings Town
The main advantage of trading using opposite Salesforce and Kings Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Kings Town 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 Kings Town will offset losses from the drop in Kings Town's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Kings Town vs. Taichung Commercial Bank | Kings Town vs. Far Eastern International | Kings Town vs. Taiwan Business Bank | Kings Town vs. Sinopac Financial Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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