Correlation Between Salesforce and Burshane LPG
Can any of the company-specific risk be diversified away by investing in both Salesforce and Burshane LPG 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 Burshane LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Burshane LPG, you can compare the effects of market volatilities on Salesforce and Burshane LPG 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 Burshane LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Burshane LPG.
Diversification Opportunities for Salesforce and Burshane LPG
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Burshane is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Burshane LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burshane LPG 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 Burshane LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burshane LPG has no effect on the direction of Salesforce i.e., Salesforce and Burshane LPG go up and down completely randomly.
Pair Corralation between Salesforce and Burshane LPG
Considering the 90-day investment horizon Salesforce is expected to generate 1.81 times less return on investment than Burshane LPG. But when comparing it to its historical volatility, Salesforce is 1.23 times less risky than Burshane LPG. It trades about 0.21 of its potential returns per unit of risk. Burshane LPG is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,452 in Burshane LPG on August 30, 2024 and sell it today you would earn a total of 485.00 from holding Burshane LPG or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Burshane LPG
Performance |
| Timeline |
| Salesforce |
| Burshane LPG |
Salesforce and Burshane LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Burshane LPG
The main advantage of trading using opposite Salesforce and Burshane LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Burshane LPG 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 Burshane LPG will offset losses from the drop in Burshane LPG'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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