Correlation Between Salesforce and APA
Can any of the company-specific risk be diversified away by investing in both Salesforce and APA 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 APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and APA Group, you can compare the effects of market volatilities on Salesforce and APA 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 APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and APA.
Diversification Opportunities for Salesforce and APA
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and APA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group 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 APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of Salesforce i.e., Salesforce and APA go up and down completely randomly.
Pair Corralation between Salesforce and APA
Considering the 90-day investment horizon Salesforce is expected to generate 0.41 times more return on investment than APA. However, Salesforce is 2.45 times less risky than APA. It trades about 0.11 of its potential returns per unit of risk. APA Group is currently generating about 0.01 per unit of risk. If you would invest 12,990 in Salesforce on August 28, 2024 and sell it today you would earn a total of 21,328 from holding Salesforce or generate 164.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
Salesforce vs. APA Group
Performance |
| Timeline |
| Salesforce |
| APA Group |
Salesforce and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and APA
The main advantage of trading using opposite Salesforce and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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