Correlation Between Salesforce and Mercuries Life
Can any of the company-specific risk be diversified away by investing in both Salesforce and Mercuries Life 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 Mercuries Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Mercuries Life Insurance, you can compare the effects of market volatilities on Salesforce and Mercuries Life 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 Mercuries Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Mercuries Life.
Diversification Opportunities for Salesforce and Mercuries Life
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Mercuries is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Mercuries Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercuries Life Insurance 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 Mercuries Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercuries Life Insurance has no effect on the direction of Salesforce i.e., Salesforce and Mercuries Life go up and down completely randomly.
Pair Corralation between Salesforce and Mercuries Life
Considering the 90-day investment horizon Salesforce is expected to generate 1.25 times more return on investment than Mercuries Life. However, Salesforce is 1.25 times more volatile than Mercuries Life Insurance. It trades about 0.08 of its potential returns per unit of risk. Mercuries Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 17,013 in Salesforce on November 2, 2024 and sell it today you would earn a total of 18,387 from holding Salesforce or generate 108.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.77% |
| Values | Daily Returns |
Salesforce vs. Mercuries Life Insurance
Performance |
| Timeline |
| Salesforce |
| Mercuries Life Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and Mercuries Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Mercuries Life
The main advantage of trading using opposite Salesforce and Mercuries Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Mercuries Life 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 Mercuries Life will offset losses from the drop in Mercuries Life's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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