Correlation Between Salesforce and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Salesforce and SolarEdge Technologies 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 SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and SolarEdge Technologies, you can compare the effects of market volatilities on Salesforce and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and SolarEdge Technologies.
Diversification Opportunities for Salesforce and SolarEdge Technologies
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and SolarEdge is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Salesforce i.e., Salesforce and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Salesforce and SolarEdge Technologies
Considering the 90-day investment horizon Salesforce is expected to generate 0.28 times more return on investment than SolarEdge Technologies. However, Salesforce is 3.61 times less risky than SolarEdge Technologies. It trades about 0.27 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.06 per unit of risk. If you would invest 24,767 in Salesforce on September 2, 2024 and sell it today you would earn a total of 8,232 from holding Salesforce or generate 33.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Salesforce vs. SolarEdge Technologies
Performance |
| Timeline |
| Salesforce |
| SolarEdge Technologies |
Salesforce and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and SolarEdge Technologies
The main advantage of trading using opposite Salesforce and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| SolarEdge Technologies vs. Xinyi Solar Holdings | SolarEdge Technologies vs. Superior Plus Corp | SolarEdge Technologies vs. NMI Holdings | SolarEdge Technologies vs. Origin Agritech |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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