Correlation Between Salesforce and Wah Hong
Can any of the company-specific risk be diversified away by investing in both Salesforce and Wah Hong 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 Wah Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Wah Hong Industrial, you can compare the effects of market volatilities on Salesforce and Wah Hong 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 Wah Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Wah Hong.
Diversification Opportunities for Salesforce and Wah Hong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Wah is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Wah Hong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Hong Industrial 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 Wah Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Hong Industrial has no effect on the direction of Salesforce i.e., Salesforce and Wah Hong go up and down completely randomly.
Pair Corralation between Salesforce and Wah Hong
Considering the 90-day investment horizon Salesforce is expected to generate 1.16 times less return on investment than Wah Hong. But when comparing it to its historical volatility, Salesforce is 2.41 times less risky than Wah Hong. It trades about 0.27 of its potential returns per unit of risk. Wah Hong Industrial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Wah Hong Industrial on September 2, 2024 and sell it today you would earn a total of 1,170 from holding Wah Hong Industrial or generate 33.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Wah Hong Industrial
Performance |
| Timeline |
| Salesforce |
| Wah Hong Industrial |
Salesforce and Wah Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Wah Hong
The main advantage of trading using opposite Salesforce and Wah Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Wah Hong 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 Wah Hong will offset losses from the drop in Wah Hong's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Wah Hong vs. Hon Hai Precision | Wah Hong vs. Delta Electronics | Wah Hong vs. LARGAN Precision Co | Wah Hong vs. Yageo Corp |
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.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |