Correlation Between Salesforce and Information Technology
Can any of the company-specific risk be diversified away by investing in both Salesforce and Information Technology 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 Information Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Information Technology Total, you can compare the effects of market volatilities on Salesforce and Information Technology 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Information Technology.
Diversification Opportunities for Salesforce and Information Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Information is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Technology 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of Salesforce i.e., Salesforce and Information Technology go up and down completely randomly.
Pair Corralation between Salesforce and Information Technology
Considering the 90-day investment horizon Salesforce is expected to generate 1.29 times more return on investment than Information Technology. However, Salesforce is 1.29 times more volatile than Information Technology Total. It trades about 0.23 of its potential returns per unit of risk. Information Technology Total is currently generating about -0.19 per unit of risk. If you would invest 29,640 in Salesforce on August 31, 2024 and sell it today you would earn a total of 3,361 from holding Salesforce or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Information Technology Total
Performance |
| Timeline |
| Salesforce |
| Information Technology |
Salesforce and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Information Technology
The main advantage of trading using opposite Salesforce and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Information Technology 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 Information Technology will offset losses from the drop in Information Technology's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Information Technology vs. Acer E Enabling Service | Information Technology vs. Green World Fintech | Information Technology vs. Genesis Technology | Information Technology vs. Syscom Computer Engineering |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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