Correlation Between Salesforce and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Salesforce and Jia Jie 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 Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Jia Jie Biomedical, you can compare the effects of market volatilities on Salesforce and Jia Jie 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 Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Jia Jie.
Diversification Opportunities for Salesforce and Jia Jie
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Jia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical 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 Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of Salesforce i.e., Salesforce and Jia Jie go up and down completely randomly.
Pair Corralation between Salesforce and Jia Jie
Considering the 90-day investment horizon Salesforce is expected to generate 2.88 times less return on investment than Jia Jie. But when comparing it to its historical volatility, Salesforce is 2.36 times less risky than Jia Jie. It trades about 0.08 of its potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,015 in Jia Jie Biomedical on November 4, 2024 and sell it today you would earn a total of 105.00 from holding Jia Jie Biomedical or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Salesforce vs. Jia Jie Biomedical
Performance |
| Timeline |
| Salesforce |
| Jia Jie Biomedical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Jia Jie
The main advantage of trading using opposite Salesforce and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Jia Jie 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 Jia Jie will offset losses from the drop in Jia Jie'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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