Correlation Between Salesforce and Senheng New
Can any of the company-specific risk be diversified away by investing in both Salesforce and Senheng New 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 Senheng New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Senheng New Retail, you can compare the effects of market volatilities on Salesforce and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Senheng New.
Diversification Opportunities for Salesforce and Senheng New
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Senheng is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Salesforce i.e., Salesforce and Senheng New go up and down completely randomly.
Pair Corralation between Salesforce and Senheng New
Considering the 90-day investment horizon Salesforce is expected to generate 0.62 times more return on investment than Senheng New. However, Salesforce is 1.62 times less risky than Senheng New. It trades about 0.22 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.12 per unit of risk. If you would invest 33,066 in Salesforce on November 2, 2024 and sell it today you would earn a total of 2,334 from holding Salesforce or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Salesforce vs. Senheng New Retail
Performance |
| Timeline |
| Salesforce |
| Senheng New Retail |
Salesforce and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Senheng New
The main advantage of trading using opposite Salesforce and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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