Correlation Between Salesforce and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Salesforce and Agha Steel 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 Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Agha Steel Industries, you can compare the effects of market volatilities on Salesforce and Agha Steel 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 Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Agha Steel.
Diversification Opportunities for Salesforce and Agha Steel
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Agha is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries 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 Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Salesforce i.e., Salesforce and Agha Steel go up and down completely randomly.
Pair Corralation between Salesforce and Agha Steel
Considering the 90-day investment horizon Salesforce is expected to generate 0.71 times more return on investment than Agha Steel. However, Salesforce is 1.42 times less risky than Agha Steel. It trades about 0.25 of its potential returns per unit of risk. Agha Steel Industries is currently generating about -0.33 per unit of risk. If you would invest 29,472 in Salesforce on September 2, 2024 and sell it today you would earn a total of 3,527 from holding Salesforce or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Agha Steel Industries
Performance |
| Timeline |
| Salesforce |
| Agha Steel Industries |
Salesforce and Agha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Agha Steel
The main advantage of trading using opposite Salesforce and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Agha Steel vs. Habib Insurance | Agha Steel vs. Century Insurance | Agha Steel vs. Reliance Weaving Mills | Agha Steel vs. Media Times |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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