Correlation Between Salesforce and Tong Hsing
Can any of the company-specific risk be diversified away by investing in both Salesforce and Tong Hsing 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 Tong Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Tong Hsing Electronic, you can compare the effects of market volatilities on Salesforce and Tong Hsing 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 Tong Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Tong Hsing.
Diversification Opportunities for Salesforce and Tong Hsing
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Tong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Tong Hsing Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hsing Electronic 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 Tong Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hsing Electronic has no effect on the direction of Salesforce i.e., Salesforce and Tong Hsing go up and down completely randomly.
Pair Corralation between Salesforce and Tong Hsing
Considering the 90-day investment horizon Salesforce is expected to generate 0.76 times more return on investment than Tong Hsing. However, Salesforce is 1.31 times less risky than Tong Hsing. It trades about 0.1 of its potential returns per unit of risk. Tong Hsing Electronic is currently generating about -0.22 per unit of risk. If you would invest 33,053 in Salesforce on November 5, 2024 and sell it today you would earn a total of 1,117 from holding Salesforce or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.68% |
| Values | Daily Returns |
Salesforce vs. Tong Hsing Electronic
Performance |
| Timeline |
| Salesforce |
| Tong Hsing Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Salesforce and Tong Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Tong Hsing
The main advantage of trading using opposite Salesforce and Tong Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Tong Hsing 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 Tong Hsing will offset losses from the drop in Tong Hsing'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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