Correlation Between Salesforce and Altus Power
Can any of the company-specific risk be diversified away by investing in both Salesforce and Altus Power 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 Altus Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Altus Power, you can compare the effects of market volatilities on Salesforce and Altus Power 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 Altus Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Altus Power.
Diversification Opportunities for Salesforce and Altus Power
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Altus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power 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 Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of Salesforce i.e., Salesforce and Altus Power go up and down completely randomly.
Pair Corralation between Salesforce and Altus Power
Considering the 90-day investment horizon Salesforce is expected to generate 0.44 times more return on investment than Altus Power. However, Salesforce is 2.29 times less risky than Altus Power. It trades about 0.1 of its potential returns per unit of risk. Altus Power is currently generating about 0.0 per unit of risk. If you would invest 13,334 in Salesforce on August 24, 2024 and sell it today you would earn a total of 20,868 from holding Salesforce or generate 156.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Altus Power
Performance |
| Timeline |
| Salesforce |
| Altus Power |
Salesforce and Altus Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Altus Power
The main advantage of trading using opposite Salesforce and Altus Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Altus Power 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 Altus Power will offset losses from the drop in Altus Power's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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