Correlation Between Salesforce and AIB Acquisition
Can any of the company-specific risk be diversified away by investing in both Salesforce and AIB Acquisition 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 AIB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and AIB Acquisition Corp, you can compare the effects of market volatilities on Salesforce and AIB Acquisition 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 AIB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and AIB Acquisition.
Diversification Opportunities for Salesforce and AIB Acquisition
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and AIB is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and AIB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Acquisition Corp 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 AIB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Acquisition Corp has no effect on the direction of Salesforce i.e., Salesforce and AIB Acquisition go up and down completely randomly.
Pair Corralation between Salesforce and AIB Acquisition
Considering the 90-day investment horizon Salesforce is expected to generate 4.97 times more return on investment than AIB Acquisition. However, Salesforce is 4.97 times more volatile than AIB Acquisition Corp. It trades about 0.08 of its potential returns per unit of risk. AIB Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest 19,703 in Salesforce on August 29, 2024 and sell it today you would earn a total of 14,615 from holding Salesforce or generate 74.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 13.49% |
| Values | Daily Returns |
Salesforce vs. AIB Acquisition Corp
Performance |
| Timeline |
| Salesforce |
| AIB Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and AIB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and AIB Acquisition
The main advantage of trading using opposite Salesforce and AIB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, AIB Acquisition 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 AIB Acquisition will offset losses from the drop in AIB Acquisition'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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